Consumer Spending

Investors need to make a decision in the coming days: Should they trust Federal Reserve Chairman Ben S. Bernanke's encouraging words about the future or give in to worries about weak consumer spending? Bernanke's declaration Friday that the economy was on the verge of recovery sent Wall Street surging and Treasury prices falling as investors poured money into stocks. The major indexes set new highs for 2009. But investors have extremely short attention spans. A new economic report or a comment on the economy from a company or government official drives trading, and reports from just a day or two earlier seem to be forgotten.

NEW YORK -- Stocks fell in early trading today amid concerns about a growing trade dispute between the U.S. and China. Overseas markets also fell sharply Monday on concern about tensions between two of the world's largest economies. Late Friday, the U.S. administration imposed trade penalties on tires coming into the country from China. The Chinese government quickly condemned the move and filed a complaint with the World Trade Organization, calling it protectionist and a violation of global trade rules.

In January, after putting the kids to bed, Mary Morrill and her husband spread their monthly bills, grocery receipts and checkbooks on the kitchen table and began the first of several long nights finding ways to cut spending -- especially with credit cards. They would pack their own lunches, write dinner menus to curb impulse buying at the grocery store, even cut out trips to McDonald's, which had been a treat for the kids and a convenience for the Morrills. And it all worked. "We literally have not charged anything for almost a year," said Morrill, 39, who lives with her husband and two children outside Cedar Rapids, Iowa.

It's no miracle on 34th Street, but shoppers this Christmas are expected to spend with a little more cheer compared with last year's dismal holiday season. Halloween sales, however, are expected to be scarier, with the average consumer projected to spend 15.4% less on the holiday compared with 2008 -- even though Oct. 31 falls on a Saturday this year. The findings, released in separate reports this week by the International Council of Shopping Centers and the National Retail Federation, show continued weakness in the battered retail industry, which for months has suffered as frugal shoppers have avoided malls, slashed spending and hunted for discounts.

Government stimulus programs have provided a jolt of life for home sales and consumer spending in recent months, according to data released Thursday. But the nascent economic recovery remains fragile as consumer delinquencies hit record highs and weekly jobless claims rise more than expected. Consumer spending in August jumped 1.3% from the previous month, compared with July's tepid 0.3% increase. That rise is bigger than many economists had expected and was driven by a government program that ended in August and gave consumers a credit of as much as $4,500 for trading in their old cars for new, more fuel-efficient ones.

This holiday season, don't be surprised if your gifts come from discount stores -- or if some of your friends don't buy you anything at all. Lingering economic worries will cause holiday shoppers to trim budgets and look for more deals this year, according to a National Retail Federation survey to be released today. The survey found that U.S. consumers plan to spend an average of $682.74 on holiday shopping, a 3.2% drop from $705.01 last year. The findings are in line with recent projections by numerous analysts and retail groups that call for a flat to negative Christmas season as consumers continue to worry about their jobs and finances.

Easter celebrations will involve less candy, flowers and decorations this year as consumers cut spending amid a global recession. Consumers plan to spend an average of $116.59 on the Easter holiday this year, 14% less than last year, according to a survey conducted by the National Retail Federation and BIGresearch. Total spending will decline 12% to $12.7 billion from last year's $14.4 billion. Shoppers will spend 8.3% less this year on food, the biggest category of Easter purchases, the NRF said.

After decades as the computer of choice for homes and businesses, the desktop PC is being pushed to the scrap heap by its smaller, nimbler sibling: the laptop. They've been around since the early 1980s, but portable computers are finally taking over. Last year, for the first time, American consumers bought more of them than desktops. Sixteen of the 20 bestselling PCs on Amazon.com this holiday season were laptops. U.S.

When you're not inclined to give away your product for free, make your customers believe that they're getting something for nothing. That's the thinking behind some of the offerings music fans may see this year as the recording industry scrambles to offset losses from plunging CD sales and find new sources of revenue when many people simply download music for free.

Internet holiday spending climbed 19% during the recent season, the slowest pace on record as consumers pressured by higher prices and rising mortgage defaults cut back on purchases. Online spending in November and December reached $29.2 billion, according to research firm ComScore in Reston, Va. The results trailed its forecast of a 20% gain from a year earlier. Slower Internet sales growth during the first 10 days of November pushed spending below the forecast, ComScore said.