Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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
Banned! 10 things you won't find in China China says it wants to open its economy more to the rest of the world, but Beijing keeps a tight grip on technology and access to media. These 10 items are still off limits. More
A morning at the AltSchool, an education startup that Silicon Valley is crazy about The AltSchool is a system of "micro schools" and an education software maker that has raised about $133 million from investors like Andreessen Horowitz and Mark Zuckerberg and Priscilla Chan's philanthropic fund. More
Coolest cars for $18,000 These are the best budget cars, according to the experts at Kelley Blue Book. More