Bankrate released the November 2011 Financial Security Index today, and we found some interesting trends for the holiday season.
We found that 42 percent of Americans plan to spend less this holiday season (including 49 percent of parents), and only 10 percent plan to spend more. We also found that merely 13 percent of Americans feel better about their job security now versus one year ago.
Many people are talking today about the robust Black Friday sales numbers. For me, one of the key takeaways is people are still in bargain-shopping mode, and I think the Black Friday results show that. People were out hunting down bargains, and that doesn't necessarily mean they're going to spend more this season. They're certainly more tuned into bargains than we've seen in years past.
Secondly, people say one thing and do another all the time. There are a lot of people who said they were going to stop at one plate of turkey last Thursday and they didn't. So, 42 percent of people saying they're going to spend less doesn't necessarily mean that 42 percent of people actually will spend less.
Wages have been stagnant and household costs have continued to inch higher, so there's less discretionary spending power. We still don't have an economy or a job market that's inspiring the type of confidence people need to really let loose. We've seen in the past couple of years that people tightened their belts throughout the year and then holiday shopping season came, and that was their one opportunity to let loose a little bit. We may see that unfold again this year.
The discomfort people have with regard to job security feeds through to a lot of other things: big-ticket purchases, in particular. For example, home prices are down sharply and mortgage rates are at record lows, but people still aren't buying houses in large numbers. A lot of that is because people are reluctant to take the plunge when they're not feeling secure in their jobs. When we start to see consistent and substantive job growth, that's when I think we'll see a change in people willing and able to spend more freely.
The American consumer can never be underestimated, and the consumer may come through this holiday season. But it doesn't necessarily bode well for what we're going to see in 2012 because of the difficult job market and the fact that wages have been flat for so many.