Finance website projects higher holiday spending this year

La Center and Camas, however, both saw decreases in retail trade spending during the 2014 holiday shopping season compared with 2013. Spending in Camas dipped to $18 million from $19.2 million, a 6 percent decrease. In La Center, spending also went down 6 percent from $2 million to $1.9 million.

Hopeful projections

“I wouldn’t be surprised if holiday sales were a little bit better in Washington than nationally,” said Steve Lerch, chief economist and executive director at the Washington State Economic Forecast Council. He said personal income and employment are the biggest drivers of consumer spending, and they’ve both been improving. Statewide, real disposable income is up nearly 4 percent over the last year. Personal saving rates have grown, too, according to the council.

In Clark County, higher-wage jobs experienced the most growth over the last seven years. Jobs paying $54 per hour or more grew by 26 percent, according to regional economist Scott Bailey. The number of jobs paying less than $30 per hour, though, hasn’t changed much in that same span. An estimated 11.8 percent of Clark County lives below the poverty line and doesn’t have the disposable income for substantial holiday shopping. Poverty is $24,230 or less for a four-person household.

The National Retail Federation predicts people will spend $805.65 on average this holiday season. That’s the highest amount in the survey’s 14-year history and just a few dollars more than last year’s $802.45.

Gifts for family members will total $462.95 on average, up from last year’s $458.75, the retail federation said.

Lerch points out that some economists believed that when gas prices went down, consumers would invest their savings in retail. That hasn’t really happened.

Exactly how much income people can comfortably dedicate to the holidays and how much they choose to spend is a nuanced subject that’s difficult to forecast with certainty.

Regional economist Scott Bailey refrains from forecasting how fruitful the holiday shopping season will be. He said predictions can often be inaccurate. Such organizations as the National Retail Federation have a vested interest in predicting that shoppers will spend a lot.

Holiday boom

In general, as the economy expands in terms of population and wages rise, more people will spend money during the fourth quarter. Also, there’s a hiring boost in October and November every year as stores hire temporary, holiday employees, Bailey said. Those people have more money for retail spending, whether it’s related to the holiday or not.

Wallet Hub, a personal finance website, says Vancouver residents should budget to spend no more than $848 on holiday gifts, food and decorations. That’s based on income, age, debt, monthly expenses and savings. The figure considers somebody with a good amount of savings and a debt-to-income ratio of 22 percent for a renter and 43 percent for a homeowner, Wallet Hub said. (Debt-to-income ratio is the percentage of income that goes toward covering debts, such as car payments, student loans, credit card payments, mortgages, etc.)

Wallet Hub calculated maximum holiday budgets for 563 cities. The budget for our neighbor to the south, Portland, is a bit higher at $865. Vancouver ranks 247th and Portland 227th — relatively middle of the pack when it comes to spending caps. Seattle ranks 105th and has a budget of $1,140.

Those with the highest limits live in Palo Alto, Calif., a tech hub where the median household income is $126,771. People who live there can afford to spend up to $2,886 on the holidays, Wallet Hub said. The lowest budgets, just $68, are found in Albany, Ga., where median household income is $28,303.

Over 72 percent of people surveyed in October by the National Retail Federation said they plan to spend less overall this year. Nearly half of those surveyed said they said they would shop for sales more often. More people are comparing prices online and using coupons, the survey said. More than half of those surveyed said they planned to shop at discount stores.