Middle-class Americans might have a tougher time paying off their holiday debt this year, since they tend to enjoy higher credit limits, but not necessarily more cash than those lower down the economic ladder.
Information from Harris Interactive shows households earning between $50,000 and $75,000 annually will take an average of 2.6 months to pay off 2014 holiday debt, multimedia journalist Jessica Glazer writes in an article for data-crunching site FiveThirtyEight
But lower-income households that make below $50,000 will take less time than the middle class — an average of two months — to pay off their holiday debt.
As for U.S. households with more than $100,000 in income, they will need only one month to pay down their holiday spending.
Matthew Ong, a retail analyst at NerdWallet, told Glazer the comparisons show that middle-class families might have more credit available to them, but that does not mean they have more money to shop with.
A survey from Experian Consumer Services
found that Americans plan to spend an average of $757.57 during the holiday shopping season in 2014, up from $721.96 last year.
Of the 1,005 adults polled, 82 percent said they planned to make purchases either with their credit cards or via a layaway plan this year.
Jeffrey Snider, head of global investment research at Alhambra Partners, an asset management firm, said U.S. consumer spending estimates from Black Friday weekend were not encouraging.
The National Retail Federation
reported average spending per adult was off 6.4 percent from 2013, and online spending was down 10.2 percent during the same weekend compared with last year.
"The initial indications from the retail outlets are so far beyond bad, worse than even last year's decline," Snider wrote in a column on his firm's website
In Snider's view, poor holiday shopping totals by consumers call into questions whether government measures of GDP and employment are capturing the true health of the U.S. economy.
"It is not 'unexpected' at all to see that Black Friday spending peaked in 2012, especially since so many indications of consumer health (including alternate payroll estimates, as well as labor participation and even household formation) changed trajectory, or even stopped rising, right around that time. Spending is now down not just two years in a row, but to levels below even 2011!" he wrote.
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