by Calculated Risk on 11/14/2008 11:54:00 AM

From American Research Group, Inc.: Shoppers Cut 2008 Christmas Spending Plans in Half from 2007

Shoppers around the country say they are planning to spend an average of $431 for gifts this holiday season, down from $859 last year according to the twenty-third annual survey on holiday spending from the American Research Group, Inc. The overall average planned spending is down almost 50% from 2007 and it is the lowest level of planned spending recorded by the American Research Group since 1991.

While planned spending increases as Christmas approaches, a majority of shoppers are beginning the holiday shopping season saying they plan to cut their gift spending in half from a year ago.

In telephone interviews with a random sample of 1,100 adults nationwide conducted November 10 through 13, 2008, the average planned spending of $431 for 2008 is down about 50% from planned spending in the 2007 survey.

Year	Average Spending	Percent Change
2008	$431	-50%
2007	$859	-5%
2006	$907	-4%
2005	$942	-6%
2004	$1,004	+3%
2003	$976	-6%
2002	$1,037	-1%
2001	$1,052	+ 9%
2000	$968	+ 3%
1999	$939	+ 1%
1998	$928	+ 34%

This table from American Research Group shows the planned spending for each holiday season since 1998. Although actual spending changes (and spending will not be off 50% compared to 2007), this does show consumer pessimisim is very high.

Combined with the sharp plunge in October retail sales, this suggests a very weak fourth quarter for personal consumption expenditures (PCE) and suggests that forecasts for Q4 GDP might be too high.

Although the table only goes back to 1998, planned spending is a the lowest since the 1991 recession.