As I’m sure you’re well aware, gasoline prices have been unusually high for this time of year and have been sitting near record highs for the past two weeks. On top of that, prices have yet to show signs of easing any time soon.
While this would usually be an inconvenience (see the past three summers), with the “Housing ATM” essentially cut off, consumer sentiment tanking and the economy quickly moving towards recession, it looks like what would have already been a slow holiday spending season will be hit even harder due to the increased cost at the pump.
According to a recent poll on Daily Fuel Economy Tip, nearly 75% of consumers plan on spending less on gifts this holiday season than they normally would.
Here’s how people responded when asked, “will high gas prices affect how much money you spend on gifts this holiday season?”:
- 43% said they would spend significantly less this holiday season
- 31% said they would spend slightly less this holiday season
- 20% said they would not reduce their spending this holiday season
- 5% said they were unsure how higher gasoline prices would affect their holiday spending
I hope you weren’t expecting to receive anything big or expensive this holiday season, because if you were, it looks as if you’re going to be disappointed.
With consumer spending accounting for nearly two-thirds of all economic activity in the United States, the fact that nearly three out of every four of us plan on spending less money in the coming months certainly pushes the chances of a recession from somewhat realistic to a relative certainty.
{ 7 comments… read them below or add one }
If 43% spend significantly less this holiday season it’s not just the US that’s looking at a recession.
Brian – out of interest – how many people were questioned? If it’s a large amount of people we should all be bracing ourselves for some tough times ahead…
The results of the survey, while interesting, do not make these types of predictions possible. The sample is highly non-self-weighting, in that the readers of Brian’s blog are self-selecting and certainly share some characteristics. At the least, this would include interest in, knowledge of, and sensitivity to gas prices.
While this fact does not mean the economy isn’t in danger due to consumer reluctance to spend for gifts in the face of rising fuel prices, neither can it show that it is.
I think that, rather than “how many people were questioned” (which implies a kind of formal survey) the question is “how many readers responded?”
So…. how many readers responded?
Rob
Thank you for correcting my sloppy questioning.
Happy to be of service!
Hi – sorry for the delay in responding. 86 people responded. I understand that this certainly isn’t a very large population, and I do realize that the results are probably skewed slightly. That being said, I don’t believe it’s out of the realm of likelihood that MANY people’s holiday spending will be affected by higher gasoline prices.
I certainly agree with that. It’s just the statistician/mathematician in me that is compelled to point out that the survey, while interesting, doesn’t prove it.
Hi – I’m a newcomer to the site, and I find a lot of what you say interesting, but I have to take issue with this post.
I don’t want to rehash Rob’s point, but as he noted, the participants in your survey (who, I’m assuming, are all readers of this site – correct me if I’m wrong) are *highly* self-selecting.
You admit in your comment that these results “are probably skewed slightly” due to this selection bias. Maybe it’s only semantics, but I’d remove the words “probably” and “slightly.” To me that’s like saying that responses to a poll on http://www.hillary2008.com about the capability of a potential woman president “are probably skewed slightly.”
What I take further issue with is the fact that you use these admittedly skewed results to bolster your rather inflammatory claim that “the fact that nearly three out of every four of us plan on spending less money in the coming months certainly pushes the chances of a recession from somewhat realistic to a relative certainty.”
Now, I’m not claiming that the US economy won’t enter a recession soon, or even that it hasn’t already begun contracting on a macro level. I’m just saying that using inherently biased results to make such provocative statements as characterizing a recession as “a relative certainty” is both misleading and dangerous. And I realize that you’re not the only one out there doing this, but you seem like an intelligent guy, which is why I’d expect you to know better.
I have no problem with using these surveys as a piece of evidence in making predictions (even negative ones), but at least provide the appropriate disclaimers.
In spite of my objection here, I enjoy the site and appreciate your writing.