Declining Gas Prices

While I am sure many of you have felt the relief of declining gas prices over the last few months, will this have an impact in our Holiday shopping.  With gas prices down over 50% from there summer highs, what are families willing to use the extra budget room on….

For the most part we agree that families now have “extra” monies to spend on a monthly basis due to the drastic decline in gasoline prices, however we are not so confident that those monies will transfer over to an increase in Holiday spending.  With the talk of layoffs and the potential for an even longer recession than prior ones, many Americans are taking prudent steps to actually try and save any extra income to prepare for potentially worse economic times.  

This action can be looked upon as a double-edged sword, while good for families to create savings, the increase in savings could also hurt the already weak economy.  Increases in family savings generally come from cuts in their discretionary spending, this cut in spending is what has the potential to create even worse economic environment.  However there is still hope for the Holiday shopping season, if we receive any signs that the worst may already be over, individuals may once again be more willing to spend this Holiday season.  With two and a half weeks remaining till Christmas there is a good amount of time for individuals to change their perceptions of the future (hopefully becoming more confident).  While Holiday sales are depressed at the current time we could see those figures swell into the actual Holidays as economic fears dwindle. Which could create an upward trend in the market as we close out the year. DC