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.

Subscribe to Economy
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Keisha Lamothe, CNNMoney.com staff writer

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. To top of page

Photo Galleries
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.