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Now with a look at the season of the factors that could impact all that is -- -- chief economist at the Credit Union National Association.
Joining us now from Washington DC.
Is it do you think that there's a chance -- the forecast comes in May be even lower than some people are expecting because again.
That big question about those looming tax increases at the end of the year at DC doesn't get something done about it.
Yeah well our survey it was done about.
Two weeks ago just after the election and quite frankly -- fiscal cliff doesn't show up so much and our results.
Back we're expecting holiday spending this year to be slightly better than last year last year grows about three and a half percent we're saying around 4% this year.
And I think what's driving consumers is that they're paying more attention to their own.
Financial condition and their own circumstances.
And less to what's coming what's going on here in Washington.
Although I suspect that's changing pretty quickly you know -- a lot of the news covering the fiscal cliff was might both be restricted to the the financial sector in the business sector who are as you know in your -- even talking about -- very concerned about this.
I think that the the consumers the general public are just beginning to latch -- this.
-- in people's Bob personal financial situations.
Better -- -- to justify that spending increase she seemed to say yes.
Well I again remembered and are not all people are like some people's financial conditions better some worse than a year ago.
What happened -- and that this year in our survey.
More people said they were better off.
Than the previous year that was the case last year last year.
And on about a two to one margin.
Respondents told us they were worse off than a year ago and that has really narrowed this time so more and more people.
Our feeling a little bit better which we think and again we're not talking about you know fantastic holiday spending season.
But we think it's gonna be yet another nudge -- in the right direction from last year.
Why -- what about it did impact of super storm sandy bill have you looked into that at all because again.
Any shopping that would have been dying in late October early November was clearly postponed.
Do you think that that could sat spending in some way because people were spending money on other things that they needed to prepare for the storm.
And it it certainly could are incarcerated and pick that up specifically -- and again.
Our surveys -- nationwide -- today and and it it showed on balance.
People planning to spend a little bit more the year this year than last year.
And people you didn't -- find that the percentage of those worried about monthly debt payments fell how critical is back.
For her -- holiday shopping -- that.
Well I think I think that's one of the reasons that that the consumer spending is looking up a bit is that.
That the household sector is in better condition and have been for four years -- -- very little -- Great Recession was was really destructive to the household sector one of the worst.
The worst recession for the -- sector since the 1930s.
And we've had this gradual recovery since then it's been very weak but at least been moving in the right direction.
The house -- debt burden is is coming down they're building up some backlogs.
-- employment is picking up so all of these things again are moving us more more into the right direction in terms of the stronger spending this year.
Any sense from your research on where people will be shopping not it may be not necessarily specific retailers by name but.
How will they be spending -- dollars this season.
-- we we don't ask them that we just we just asked them how much they plan to spend compared to the previous year so.
Our our survey doesn't give anymore information from one -- -- sources to which of course suggest -- I continued to.
Transition from in store locations to online shopping.
Do you believe though that this it I guess improvement in the way people are feeling about their outlooks will continue into the -- -- Well that does depend entirely on what happens with a fiscal clarified.
You know most most people don't even -- stand with the fiscal cliff is they think it's that -- -- going to be a debt crisis as opposed to if we do go over the fiscal cliff going to be a sharp reduction in the federal government's deficit because a very big tax increases and spending cuts.
But if we get closer and closer to the end of the year and congress has not come to some reasonable solution the financial markets we think they're gonna really.
That signal to the household sector that things are bad.
You know if that if the stock market is tanking in the last few weeks of the year because congress hasn't done anything that's when household sector will really take notice.
People are much less invested in US stocks in this country -- that you've seen just hundreds of billions of dollar coming out of US stock funds -- -- years our people less connected to what the market -- -- -- the market tells them now.
Now I met no I think they're actually quite connected to it because although they're not directed.
Invested through mutual funds -- their 401K and that you know the defined contribution pension plans that we have now basically mean.
Most households are indeed connected to the stock market and that's why I think there -- that will be the mechanism.
That signals through to consumers -- something's wrong here.
And what we're hoping is that congress is also aware of this they remember last summer and what they will do is take action before that so that the stock market doesn't have to -- Forced them to do so.
From your mouth that there ears bill thank you so much happy holidays bill -- -- -- take care.
We have a lot more coming up stay with.
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