NEW YORK (Reuters) - U.S. households could cut spending on Christmas gifts by about 11.3 percent this year, the Conference Board said on Friday, as the worst economic crisis since the Great Depression erodes consumer wealth.
The Conference Board’s Christmas gift spending intentions survey covering 5,000 households found that consumers were in a less-generous mood, planning to spend an average of $418 on presents, compared with last year’s estimate of $471. The survey was conducted in November.
“This is shaping up to be one of the most challenging holiday seasons in years and it’s going to take more than the usual discounts and incentives from retailers to get consumers to spend more freely,” said Lynn Franco, director of the Conference Board Consumer research center.
The U.S. housing market’s collapse has contaminated both the domestic and overseas economies, triggering the worst financial crisis since the Great Depression of the 1930s.
The crisis has manifested itself in tight credit conditions globally that have constrained both corporations and individuals’ ability to obtain loans, leading to massive job losses.
The U.S. unemployment rate surged to 6.5 percent in October, the highest in 14 years. A Reuters/University of Michigan Surveys of Consumers released on Friday found that consumers expect the jobless rate to top 8.5 percent by the end of 2009.
Reporting by Lucia Mutikani; Editing by Dan Grebler