Energy costs to hurt holiday spending
Consumers are likely to spend less this season due to the rising costs of gasoline and heating oil, a survey shows.
NEW YORK (CNNMoney.com) -- More than a third of American consumers said they will spend less this holiday season and cited rising energy costs as the main reason, according to a report released Monday.
In a survey by the Consumer Federation of America (CFA) and Credit Union National Association (CUNA), 35 percent of respondents said they planned to spend less this year. That number was up from 32 percent last year and represents the biggest decline since the survey was first conducted eight years ago.
Of those who said they would spend less, 38 percent - compared to 32 percent last year - blamed the rising cost of gasoline and heating oil.
"It is noteworthy how frequently consumers cited rising energy costs as a reason they plan to cut back their holiday spending, far more frequently than they cited general family finances," CUNA Chief Economist Bill Hampel said in a statement.
"They are clearly quite concerned about the escalating price of gasoline and home heating oil," he added.
Other influences that could play a role in consumer spending are "price of gifts" (32 percent), "your family's current finances" and "your general household expenses" (both under 30 percent).
Surprisingly, despite record foreclosures and a national credit crunch, fewer consumers said they were concerned about making monthly payments on mortgages and loans. The survey said 40 percent were concerned about making these payments, down from 43 percent last year.
The percentage of consumers worried about paying off credit card balances from holiday related spending dropped to 24 percent from 33 percent last year.
Of the groups surveyed, lower-middle income households - between $25,000 and $50,000 - were the most likely to cut their spending and voiced the most concerns about debt payments.
"The good news is that a declining percentage of Americans express concern about paying off consumer and mortgage debt," said CFA Executive Director Stephen Brobeck.
"The bad news is that these percentages are relatively high, especially for moderate-income and minority Americans," he said.
Major retailers also expect to feel a pinch this holiday season. Wal-Mart (Charts, Fortune 500), Macy's (Charts, Fortune 500), J.C. Penny (Charts, Fortune 500), and Home Depot (Charts, Fortune 500) have expressed concerns that higher energy costs, a battered housing market, and credit woes will dampen sales.