American Households Will Spend More on Holiday Gifts This Year, Conference Board Survey Says

On Tuesday, the Conference Board announced that its surveys show that consumers are feeling joyful as the Holiday Season comes, and are expected to spend more on gifts this year than they did last year.

The report comes as many analysts are saying that they expect consumer retail spending to fall off modestly from last year's Holiday Season, citing higher energy costs and generally more expensive "wish lists" among other factors.

However, the Board finds that American households are expected to spend an average of $471 on gifts this season Last year's estimate was $449.

More specifically, 33% of all households intend to spend $500 or more on Christmas gifts. 35% expect to spend from $200 to $500, and 31% anticipate spending less than $200.

Regionally across the United States, East South Central households expect to spend the most at $583 each, while those in the West North Central region expect only to spend $397 each. All other regions fall somewhere between those two.

Nearly 40% of respondents also say they will do at least some Christmas gift buying via the Internet this year. Concerning last year's online shopping experience, 91% of respondents said they were pleased with their experience last year.

Books, clothing items, toys and games, and DVDs are the items that households expect to buy the most online.

TNS, the world's largest custom research company, conducted the survey. 5000 households responded.

"Consumers are in a festive mood heading into the Thanksgiving holiday," says Lynn Franco, Director of The Conference Board Consumer Research Center.

However, in September the National Retail Federation said that it expected holiday retail sales to be up only a dismal 4%, which would make for the lowest year-over-year increase in sales since 2002 when the economy was still recovering from the Internet Stock Bubble's busting. Other retailer groups made even worse predictions. The 10-year average is 4.8%.

Retailers have already reported disappointing sales figures from October.

Economists who are going along with the more gloomy predictions say that consumer confidence has been depressed by the record spate of home foreclosures in 2007 and people are not as willing to run up as more debt in holiday spending this year as they were last year. The majority of all holiday season gifts are paid for with credit cards.

One of the effects of the predicted gloom and doom, however, is that retailers have already begun to make bargain buys available and known about. Typically the bargain buys are put out deeper into the holiday shopping season, when merchants can better assess how much merchandise they still need to move to have a profitable season.

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