Kennedi Bates
AP Economics
Mrs. Straub
December 7 2014
It’s The Most Wonderful Time of Year
It’s that time of the year again, where the stores are filled with Christmas decorations and Christmas lights glow throughout your neighborhood. This is also a huge time of year for producers, as well as buyers! Gift-giving is an essential part of this holiday season. Consumers are looking for those perfect gifts to give to their children, spouse or friend and producers want to make sure you find out exactly what you are looking for. So how much exactly do you think you’re willing to spend this Christmas? $100? $200? How about $1000? Well according to the 30th annual survey on holiday spending from the American Research Group, Inc, “Shoppers around the country say they are planning to spend an average of $861 for gifts this holiday season”. That is a whopping 8% more than the average planned spending from 2013. The graphs below show us more on how average spending has increased and decreased throughout the years.
Year
|
Average Spending
|
Percent Change
|
2014
|
$861
|
+ 8%
|
2013
|
$801
|
- 6%
|
2012
|
$854
|
+ 32%
|
2011
|
$646
|
- 2%
|
2010
|
$658
|
+ 58%
|
2009
|
$417
|
- 3%
|
2008
|
$431
|
- 50%
|
2007
|
$859
|
- 5%
|
2006
|
$907
|
- 4%
|
2005
|
$942
|
- 6%
|
2004
|
$1,004
|
+ 3%
|
With average spending at one of the highest it’s been in years, the Christmas season will bring a lot more total revenue than years before. This will help producers in the short run, as well as the long run. To watch an interesting video about how big consumers are really spending this year, click on this link.
So now you’re probably wondering, how much of an impact Christmas really has on the economy. Well, Christmas is the by far, the largest economic stimulus for countries across the world. An increasing number of Non-Christians have started to celebrate this holiday as well. According to Statisa.com, “The United States' retail industry generated over three trillion U.S. dollars during the holidays in 2013. These holiday sales reflected about 19.2 percent of the retail industries total sales that year” That’s about ⅕ of their sales, was from Christmas season alone. With an average spending rate increase of 8%, imagine how much certain industries will make this year, compared to last year. This is not only good for sellers who gain more profit but also for consumers. By an increased average rate, this means that there has been a possible shift in the demand curve with consumer’s income increasing this year. Also last year, 768 thousand employees were hired throughout the United States to help with the overwhelming demand for products during this busy shopping time. This helped with America’s high unemployment rate and allowed many to be able to buy that special present for their loved one. To read more information about holiday shopping, click this link and see how Americans spend their money!
So while you’re shopping around this Christmas season, looking for the perfect gifts for that perfect someone, think of how much of an impact you are making on the economy. Also think about how this year compared to last year. Has your total income increased? Are the prices for certain products cheaper? Are you enjoying it more than usual? All of these simple things lead to a growing economy, with Christmas time being one of the most important tools for the economy to succeed. Happy shopping and enjoy this amazing time of year!
Works Cited
"How Do We Spend Those Christmas Dollars? | Economics." Economics How Do We Spend Those Christmas Dollars Comments. Web. 8 Dec. 2014. <http://www2.cincinnati.com/blogs/economics/2012/12/19/how-do-we-spend-those-christmas-dollars/>.
"Topic: U.S. Christmas Season."Www.statista.com. Web. 7 Dec. 2014. <http://www.statista.com/topics/991/us-christmas-season/>
Christmas is a huge economic booster in america. Without it, not nearly as many toys would be sold and businesses would not make as much money. For most people, it is there busy season at work and once they get through it, everything else for the year is relevantly laid back compared to Christmas time. Right after Christmas is New Years so it gets you twice. People don't really buy gifts for new years but they have parties and buy a lot of food. I don't know what the state of the US economy would be if we didn't celebrate Christmas or New Years. It would be a huge loss.
ReplyDeleteHi Kennedy,
ReplyDeleteMerry early Christmas! Though Christmas is exciting and joyful, there are also, like you have conveyed, many economic benefits to the holiday. Personally, Christmas is one of the only times that I spend a lot of money on gifts and even have a savings envelope that I add money to throughout the year to spend on Christmas gifts. There is no doubt that this time of the year adds demand and therefore surges money into the economy.
Throughout the years, Christmas shopping has become and even more important part of the holiday season. Many years ago, Christmas was more about spending time with family, and presents were simply an added bonus. Nowadays, however, it seems the opposite is true. Everyone is so caught up in what gifts they are giving and getting, that they tend to pay less attention to the “true meaning of Christmas”. This seems negative, and in some ways it is, but in terms of the economy, it can be good, because of the amount of extra money that enters the economy during the holiday season.
ReplyDeleteThe statistic, 19.2% of total sales of the year, is very interesting. In just one month span, the United States is able to generate nearly 1/5 of the year’s total sales. In addition to this statistic, the visual depicting the percent change of spending throughout the years is also very surprising. Between 2008 and 2012, percent change varied from -50% to +32%. When 1/5 of the year’s sales occur during this time, the sales appear very inconsistent and not guaranteed. Since this is a very important economic time for businesses, they should formulate a plan to better regulate sales during the holidays.
ReplyDeleteChristmas is a really big time of the year, and with all of the shopping thats beginning done we can see that this is the time of the year where we are willing to put up the money in order to get those gifts that are friends and family wants. With the 8% increase in sales from last year, the stores are in need of workers to help with the increase in demand this means that the economy could have a slight improvement.
ReplyDeleteKennedi, an interesting point is how you brought up how in the business market, the holiday of Christmas is not a religious holiday, but a cultural one. This definitely amps up the amount of revenue that businesses are able to rake in during the holiday season. The same could be said about Easter, (and the Easter Bunny) but with a less amount of impact on the economy.
ReplyDeleteI definitely agree with you, in that Christmas shopping and the Holidays itself bring about lots of revenue for the economy and joy for us shoppers in the process. Although we are spending 100s of dollars on gifts, the Christmas spirit takes away the pain of the money we end up draining in a shopping trip. Like Alyssa said, Christmas shopping is when I spend the most amount of money and my friends/family do the same as well. I know just yesterday, I got all my shopping done at Target and definitely spent more than expected, but the products are definitely more demanding during this time of year than anything else. Great post!
ReplyDeleteEvery one looks forward to all the gifts during Christmas, there is no denying it. Yet we still complain about how broke we got from buying all these gifts. We may be more broke at that time but we put so much money into the economy that it will eventually flush back into our lives and we will get our money right back, hopefully. Holidays are essential to the economy because it is what gives it it's boost the most.
ReplyDeleteEveryone is always willing to go above and beyond to give around the holiday season, and I agree that people do invest in a lot of presents during this season. Whether it's investing on Black Friday or investing just the weekend before Christmas. Many people complain that we don't have enough money, or sorry we can't do that because we don't have money, but yet we still will dig deep, and make sacrifices to get a present for a certain someone. Christmas time is usually the common time when people are willing to spend more than they actually have in their pockets, but it's always the one time of year that people can give back and know that they did something good for someone. I feel that sales will be bigger every year, due to the fact that everyone is willing to go out and spend more money to give back.
ReplyDeleteIt's very interesting to see the details of the effect Christmas has on our economy. I have really started to notice that many people have a great devotion to the Christmas holiday, and will ultimately end up spending lots of money on it. It brings families together, it makes everyone happy, and everyone buys Christmas trees.
ReplyDeleteI find it pretty swanky how everyone around the holidays is willing to spend a small fortune not just in general but on every person they care about. I definitely agree with the chaos and buzz and that forms from it all encouraging the economy to grow. Whether be from consumers helping businesses or businesses hiring more people, giving them an economic boost through employment. It's interesting to see how much spending over the years has increased and how more willing people are to buy things. Is it because of the increase in technology making the more desirable things more expensive, or that the overall income has increased when compared to cost of living. Either way Christmas is an important part of the U.S. economy.
ReplyDeleteI know a lot of the time, all these economists are saying that the economy is, generally, on the rise, while many American citizens might not be so believing of this phenomenon. I think that this study really proves what the economists are saying. If people have more disposable income to spend on non-essential products, that is usually a strong signifier that the economy is on the rise. I think it would be interesting to look at that line graph you presented for Christmas spending over the years and compare it to the changes in the overall economy over the years. I bet both of the graphs would look very similar.
ReplyDeleteThis was a great topic to write your article on since Christmas is coming up. It really makes us realize how crucial holiday spending is for the economy. Not only does it raise the overall GDP because so many people are buying new goods, but it also is one of the happiest times of the year. Having a happy nation of people is also very important to the success of an economy even though it cannot be measured in a numerical value.
ReplyDeleteI agree that christmas is one of the most beneficial times of the year for businesses. This is the time when people are willing to spend more and in turn, boost the economy more. Because of this, businesses need to produce more and more to up their supply since demand is high and this means that more people have jobs leading to lower unemployment, at least during the holiday season. Overall, Christmas isn’t only a holiday, but a very important economic time as our economy wouldn’t be doing as well without it.
ReplyDeleteWhile it's not a shocker that people still do shopping on Christmas time, I still find it crazy that people spend more money on Christmas than they do Black Friday one month earlier. While its great the economy booms from all the revenue created from this particular holiday, isn't it a bit of a bad idea to just depend on two particular days of the year to generate a profit? I mean aside from Black Friday and Christmas, can you name any other significant holiday where people are willing to spend hundreds of dollars? Point being, its great to see the economy boom from these truly special times of the year, but eventually it may work against these major industries who are so dependent on these two days.
ReplyDeleteTimely blog post given this time of year and the general upturn of the economy. I know during holiday season a lot more revenue is brought in thus bettering the economy, but are the after affects worse? A lot of jobs may be created in the months of November, December, and January, but I feel like these workers will only be employed seasonally. I think that Christmas is good for economy and the growth is significant, but I think there are also drawbacks that come along with this expansion.
ReplyDeletePersonally for me, Christmas is my favorite holiday so I loved your blog. Christmas, like you said is probably one of the biggest boosts for the economy throuhgout the year if not the biggest. While reading through this what struck me as weird was why did the budget in 2004 exceed 1000? Maybe was that when our economy was best, and the downfall was due to the recession? Either way, it is no surprise that people aren't afraid to pull their wallets out during the holiday season. In some ways it helps the economy and in other ways it hurts it, but over all it is indeed a huge spending period in America.
ReplyDeleteDuring the holiday season it’s very hard to stick to the spending plan that you’ve created for yourself, mainly due to the holiday cheer, and the willingness to spend any amount of money to get that friend, family member, or even pet the perfect gift. I think that the commercialization of Christmas really helps producers because the holiday atmosphere that’s created by all the lights, colors, and multiple Santas puts people in a happy mood, a mood where people are much more willing to spend more money. With the mood happy and people willing to spend more than they bargained for it’s no wonder that businesses love the holidays and the revenue that comes from it.
ReplyDeleteThe fact that consumers are willing to spend more this year is a good thing, as you said, because it means we have more money in our pockets to spend on non essential goods. However, where is this extra money going in the producer and business side of things? While they use some of it to hire employees for this busy season, wages don't seem to be increasing, which is something you would expect to happen of businesses are now receiving more money than usual for holiday seasons. They could be giving it to the top earning employees in their companies-- making them even richer than they already are-- or spending it other ways that might hurt the consumer in the long run.
ReplyDeleteWeird that people spend so much of their money just for gifts. To me a gift is just someone caring about you, its priceless and it can make anyone's day better. Although its nice to get things, I feel that people spend way too much on presents such as the xCube and PlayStation85 or whatever. It’s also kind of interesting that you can see the recession of 2009 and that people were spending lots less. Anyway, was very interesting since I love Christmas.
ReplyDeleteThis was a great topic due to Christmas being right around the corner! I always new that holiday spending was good for the economy, but never realized how truly crucial it is in order to keep the economy where it needs to be. Holiday spending forces business to produce more, because the demand of consumers will be increasing. This then causes for more job opportunities, therefore lessening the unemployment rate. Overall, Holiday shopping does not only bring joy to the nation, but helps the economy run smoothly.
ReplyDeleteI agree with you that Christmas is the time of year where businesses thrive. It amazing to think about how Christmas has developed beyond the christian holiday to those who do not believe. I also think it is interesting how much people spend on presents each year for Christmas. It is nice to see that spending is increasing and our economy is finally better. This is an economic impact that will either make or break many businesses and is a huge part of our economy.
ReplyDeleteAh Christmas, my favorite Holiday! I can't believe the average money spent on Christmas is over $800! That's insane. With all this demand needs to bring an increase in supply. Unfortunately, that doesn't always happen. Has anyone tried buying gifts on amazon? One of the most popular online shopping websites. They have great deals, so I shop on there. I'll be searching for hours to find the perfect gift, and when I do, it's most likely sold out! Bummer. Just something stores need to keep in mind. But this does mean they're selling so many of their products to be sold out, which goes to prove Christmas is a huge boost for the economy.
ReplyDeleteChristmas is definitely a time where people spend an enormous amount of money, even I am broke and I don’t have kids and a bunch of other family members to buy for. Regarding your data table, I’m really curious to see what caused that huge 32% jump in average spending per year. There’s no doubt Christmas is a great time for suppliers, and not so much consumers. Usually there aren’t too many sales going on and a lot of money is being spent around that time. Still no denying that it’s the best holiday, even it does make a big dent financially.
ReplyDeleteI agree that Christmastime is when businesses make a lot of money. Especially toy companies or clothing companies or those who are willing to have massive sales. And even those sales aren't so much more of a sale than the sales that happen during the year. If a business marks the "original" price up higher than it would normally be, they could say 75% off! sale instead of 50% off. People have more of an excuse during the holiday season to buy the overpriced name brand products they want.
ReplyDeleteThe Christmas holiday provides a great boost to economies around the globe. One of the main reasons I think you see a greater boost to economies is because of the shift of demand curves to become more and more inelastic. As people go out on their shopping sprees, the prices they are willing to pay become increasingly larger as the price tag on those perfect gifts seem essentially null. It is this combination of gift giving fever and the necessity for the perfect gift that provides the economy a much needed boost during the holiday season.
ReplyDeleteHowever, when you adjust the prices for inflation there isn't as big of an overall increase. 890$ vs comparison 390. People are spending more but it isn't really that much. These numbers also jump very easily. The holidays provide a boost, but not always as big as people think of it to be
ReplyDeleteKennedy this was such a sweet blog post and definitely brought back the Christmas spirit, since it has unfortunately ended. I’ve always been interested in finding out how much of an impact holidays, such as Christmas, have on the overall growth of the economy, so I was really interested in learning about this through your blog post. Undoubtedly, it has its positive effects; however, I also question if christmas is a good thing to the wallets of consumers. Certain consumers spend too much on christmas gifts, and once the holidays are over, they are left with an empty wallet but a lot of debt. I’m not sure if the 8% increase is due to people being receiving more money, or people just being careless about their finances and spending more than they should.
ReplyDeleteGreat post and also a great topic. I really love the info you put in this blog, as well as adding some other stuff in the midst. I work in retail and totally agree with the jump in sales. A lot of our sales have grown this christmas season. I liked the added economic aspects in this blog as well.
ReplyDelete