Yesterday Gallup released its latest survey on holiday spending plans. The title of the article nicely summarizes their findings: U.S. Christmas Spending Intentions on Pace With 2011. The Gallup chart accompanying the piece shows the spending estimates for the same week all the way back to 1999. Of course, over the 14-year time frame, the value of the dollar has shrunk considerably. If you adjust for inflation using the Consumer Price Index, that November 1999 dollar is worth about 73 cents today.
So let's compare the Gallup nominal dollar spending plans with their "real" values, chained in November 1999 dollars based on the Consumer Price Index.
The adjacent table helps to quantify the real spending plans of the participants in the latest survey. Today's holiday spenders obviously do not envision partying like it's 1999 (to borrow a Prince lyric). The latest spending plans are about 35% below the average amount reported in the equivalent 1999 survey. In fact, the table gives us a crude but convincing snapshot of the trend in consumer sentiment since the turn of the century. The contour of the inflation-adjusted series in the chart above corresponds closely with the broader snapshots of consumer sentiment:
Based on their historical data, Gallup forecasts that "holiday retail sales will increase by between 3.5% and 3.7% in 2012 compared with 2011. This projection reflects the conflicting findings that consumers' Christmas spending forecast is essentially flat this year but is holding at a fairly high level in the context of the past five years."