Wednesday, November 2, 2011
The Holiday Season
Although it's only the beginning of November, most retailers begin preparing for Christmas and Hanukah around this time in order to be prepared for the season of spending. As we learned in class, consumer spending has a lot to do with our country's GDP, so wouldn't it make sense that during the holiday season, in the midst of frantic Christmas and Hanukah shopping, that the United States' GDP would increase sharply for that quarter? According to the Nation Retail Federation (NRF), holiday sales, on average, have increased 2.6% for the last 10 years. Last year, sales increased a whopping 5.2% to $452.9 billion. That is most definitely a lot of consumer spending, which has proven beneficial for the macroeconomy. However, the problem that we face with this huge amount of spending during the holiday season deals with microeconomics, or inside individual households. Many people feel extreme pressure during this season due to financial issues, however they continue to spend a ridiculous amount on gifts, decorations, parties, etc. So how do these people balance their budget? How much is too much to spend on gifts and is their a minimum standard that our society has set?