Consumer Reports Index: Worried Consumers May Make Reluctant Shoppers During Final Weeks of December

/PRNewswire/ -- While retail spending was strong this November, consumers are feeling the pain of a weak employment picture and increased financial troubles. Americans are showing signs of waning confidence, increased stress and reluctance to spend more in December than a year ago, according to the Consumer Reports Index December report.

The Consumer Reports Retail Index showed that the Past 30-Day Retail Index for December, reflective of November activity, was 12.4, up from both the prior month (10.9) and one year ago (11.2). But with just two weeks left to go in the holiday shopping season, the Consumer Reports Index offers some troubling signs for retailers. The Next 30-Day Retail Index for December (reflecting planned December activity) is down slightly (11.8) versus a year ago (12.2). This was led by the soft performance of planned purchasing of personal electronics relative to last year (27.8% versus 32.9%, respectively).

"Despite all the talk and media attention about positive economic growth, consumers are telling us that they are not seeing or, more importantly, not feeling the difference," said Ed Farrell, a director of the Consumer Reports National Research Center. "The consumer may not be confident enough to continue spending through the holiday season. It may require deep discounting from retailers to get consumers back to the store in the final weeks of December."

After five straight months of improvement, the Consumer Reports Trouble Tracker Index points to an increase in consumer financial difficulties (e.g. missed major bills, job loss, loss of health-care coverage) and is up this month to 52.7 from 49.3 the prior month, but well below one year ago (62.0).

The Consumer Reports Employment Index is down in December to 49.2 from 50.3 in November, and is on par with one year ago (48.9), bringing to a halt three months of modest gains. December's Employment Index is indicative of an economy shedding more jobs than it is creating. In the past 30 days, the proportion of Americans that have lost their job has increased to 7.4% from 4.9% a month earlier. Past 30-day job losses are at their highest level since June (8.6%).

The Consumer Reports Index report, available at www.ConsumerReports.org , comprises five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index. Here are the key findings:

Consumer Reports Sentiment Index : 45.1*

The Consumer Reports Sentiment Index (45.1) has slipped slightly from the prior month (46.6), but is up slightly from one year ago (41.8). Sentiment has doggedly refused to enter positive territory (over 50) since it was first measured by the Consumer Reports Index on October 5, 2008 and stood at 45.3.

* The most optimistic consumers: Age 18-34 – 53.5, (down from 58.4 the prior month) and those with household incomes $100,000 or more – 54.5, even with prior month (55.1).
* The most pessimistic consumers: Households with income less than $50,000 (40.2, down slightly from the prior month at 42.2), and consumers age 65 and older (38.7, little changed from a month earlier at 38.4).


* The Consumer Reports Sentiment Index captures respondents' attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. The Sentiment Index can vary from a high of 100 to a low of 0.

Consumer Reports Retail Index : Past 30-Day 12.4, Next 30-Day – 11.8*

* The Past 30-Day Retail Index for December (reflective of November activity) is 12.4, up from the prior month (10.9), as well as a year ago (11.2). December's Next 30-Day Retail Index (planned purchases for December), is at 11.8, up substantially from last month (8.0), but is slightly trailing last year at this time (12.2).
* Looking in detail at the categories comprising the Past 30-Day Retail Index* gains were attributable to an uptick in small appliance sales versus the prior month (21.8% versus 16.7%, respectively); gains in home electronics, up to 15.0% from 11.8% a month earlier; and personal electronics (26.2), up substantially from the prior month (19.6). Versus one year ago, sales in the past 30-days were up for home electronics (15.0%) versus 11.9% last year; and for major appliances (8.1%), up from 6.8% a year ago.
* The gain in the Next 30-Day Retail Index* for December, reflective of December activity, was attributable to an increase in planned purchasing of personal electronics (27.8%), up from 18.2% a month earlier; and a gain in planned purchasing for home electronics (16.5%) versus the prior month (10.0%). Compared to last year, however, planned purchasing of personal electronics was down for this December, 27.8% versus 32.9%, respectively.


* The Consumer Reports Retail Index looks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. The Consumer Reports Retail Index represents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard and garden equipment. The Retail Index is a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency, car and home purchases are tracked separately.

Consumer Reports Trouble Tracker Index : 52.7

* Consumers faced more troubles than last month, signaling a halt to five months of improvement. The trouble tracker index increased to 52.7 in December, up from November's 49.3, though the Trouble Tracker Index is much improved from one year ago (62.0).
* Negative developments were led by an increase in consumers that lost their job in the past 30 days to 7.4% from 4.9% in November, and an increase in those that have missed a payment on a major bill (not mortgage) to 9.5% from 8.9% a month earlier.
* A sign of the weak jobs market is the proportion of consumers that have lost or face reduced health-care coverage (9.0%), up slightly from last month (8.7%), but up from a year ago (7.9%).
* On the positive side, there were fewer consumers that could not afford medical bills or medications (13.3%) versus last month (14.5%) and one year ago (15.7%). However, the improvement in the proportion that could not afford medical bills or medication may signal a change in behavior, where consumers are availing themselves of medical services less often.
* Overall, the most prevalent consumer troubles include: the inability to afford medical bills or medications (13.3%) missed payment on a major bill – not a mortgage (9.5%), and lost or reduced health-care coverage (9.0%).


* The Consumer Reports Trouble Tracker focuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest-rate increase, penalty fees, reduced lines of credit or other changes in credit-card terms, job loss or layoffs, reduced health-care coverage, or the denial of personal loans. The Consumer Reports Trouble Tracker Index is then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered.

Consumer Reports Stress Index : 60.8*

* The level of stress consumers feel they are under is down to 60.8 from 58.5 the prior month, but is below the level from one year ago (63.0).


* The Consumer Reports Stress Index captures attitudes regarding the amount of stress consumers feel compared to a year ago. It asks whether they are feeling more stressed or less stressed. When the Stress Index is more than 50, consumers are feeling more stress and when it is below 50 they are feeling less stress compared to a year ago. The index can vary from 100 (Total Stress) to a low of 0 (No Stress).

Consumer Reports Employment Index : 49.2*

Regionally, the Northeast is doing slightly better this month, led by declining consumer stress and improved retail activity. The North, Central and South have declined slightly as a result of increased consumer economic difficulties and a decline in Consumer Sentiment.

* The Consumer Reports Employment Index examines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days.

For more information regarding the Consumer Reports Index, visit www.ConsumerReports.org .

The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,263 interviews were completed (1,013 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between December 2 and December 5, 2010. The margin of error is +/- 2.8 points at a 95% confidence level. The complete index report, methodology, and tabular information are available.

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Watch Out for Black Friday, Cyber Monday: Having Holiday Shopping Smarts Will Pay Off in Time and Money

/PRNewswire/ -- Are you tired of the holidays yet? It's been a winter wonderland in most stores for weeks and prospective shoppers are being bombarded with special deals and offers earlier and more frequently than in past seasons. Retailers are trying to get more consumers in the stores than last year, so deals aren't just happening on one day.

With the increased competition for still limited dollars, the Illinois CPA Society says being aware of the tactics used to lure shoppers will help you spend your time and money wisely. Use this broader shopping season to your advantage – have a strategy, compare prices and stick to a budget. Here's what you'll need to watch out for:

* Black Friday "Month." No longer is there one day designated for kicking off the holiday season. Some stores have already started touting "Black Friday" sales; others will be open on Thanksgiving Day to offer Black Thursday night deals. Shopping can be fun and entertaining, but don't take every opportunity to shop and don't make impulse purchases (especially for yourself).
* Return Policies. If you're shopping early, make sure to read the fine print. Many stores have strict new return policies, especially during the holiday season. If a store won't allow anything to be returned after 30 days, you may want to hold off on purchasing until closer to the date you plan to give it to the recipient. Get gift receipts and keep in mind personal information may be requested on returns. Stores are being more restrictive on return policies and keeping close tabs on return records to prevent fraud.
* Store Credit Cards. If you already have a card from your favorite retailer, see if there are special discounts on Black Friday and the surrounding days. If you're making a large purchase, it may be worth it to open a card for the day, get the discount and immediately pay off the balance. Think twice about opening any new accounts if you can't pay off the balance; they often come with steep interest rates and your holiday savings will be eaten away in finance charges.
* Rebates. Essentially, rebates are big coupons. Spend the money now, but get it back later. The key is to be diligent about sending them in. Make sure you have receipts and any other proofs of purchase needed to process the rebate. Keep copies of these items since rebate submissions can be lost. Note the date you mail the rebate and read the fine print, especially about the dates for submitting the rebate and the time frame you have to purchase the rebate item. Although you're not necessarily saving money immediately upon purchase, think of a rebate as a gift to yourself come January – when the credit card bill is actually due.
* Cyber Monday/Online Shopping. Retailers are making greater use of email, mobile phone apps and texts. They want shopping to be as easy and convenient as possible so you spend as much as possible. Don't get carried away and think before you click. Use those special offers you get through email alerts, but be choosy in giving out contact information so you're not inundated with too many messages. Make sure personal information, like a credit card number, is provided only on secure sites.
* Bank Credit Cards. Choosing your card wisely could net savings and rewards; using too many cards can leave you in deeper credit card debt. See which cards have the best cash back or bonus point offers, which stores and purchases they apply to, and if there are any limits or restrictions.
* Gift Cards. There's good news and bad news with gift cards. Thanks to new government rules, gift cards must remain valid for at least five years from the purchase date. No fees can be charged for cards that haven't been used in the past 12 months. However, cards won't need to show the expiration date and fee policy information until the end of January. You may also be out of luck if the card's lost or stolen; some cards may also still have inactivity fees. And always watch out for the activation fee on some cards – they effectively lessen the total card value.


According to the Illinois CPA Society, the bottom line is making sure you have a game plan. Ask yourself how you're going to pay for all of this and what amount you're budgeting for the holidays. And do you have a list? Sticking to a list will help keep your spending on budget. If you can, try to make all of your purchases using cash or layaway to keep your post-holiday bills low. Be a smart shopper. It's not necessarily a deal just because the store says so, and it's not a deal if you don't need it or it's more than you want to spend.

If you're looking for a little help with your finances, you can find local deals, finance definitions and tips on managing your money on the Society's Twitter consumer resource, @thriftitude.

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Georgians' Holiday Spending Plans Reflect Current Consumer Mindset

/PRNewswire/ -- While not pulling back to Scrooge-ish extremes, Georgia merchants may again face cautious shoppers this holiday season, according to the latest poll from Georgia Credit Union Affiliates (GCUA).

While about half (52.8 percent) of nearly 6,000 credit union members surveyed statewide said they plan to spend about the same as last year, 44.3 percent indicated that they plan to spend less on the holiday season than in 2009. This statistic appears to reflect a continued trend in austerity around gift-giving, given that 51.2 percent of respondents to GCUA's survey in 2009 said they planned to spend less on the holidays than the previous year.

Backing up the latest poll numbers, data from 39 credit unions statewide shows Georgia consumers have a penchant for bolstering their account balances. During the first nine months of 2010, savings deposits grew by 6.3 percent and checking account balances increased by 11.4 percent.

The poll results and credit union data are included in the latest "Paying Attention" report from GCUA, gauging the mindset of Georgia consumers on economic and personal finance. The report also recaps quarterly lending and saving statistics from credit unions statewide.

"Shoppers who already trimmed their spending in 2009 will be frugal again this year," said Mike Mercer, president and CEO of GCUA. "The poll results appear to bear that out, with just 2.9 percent of respondents saying they plan to spend more this holiday season."

Overall, the poll found that:

* 52.8 percent plan to spend about the same this holiday season as last year, while 44.2 percent plan on spending less. Only 2.9 percent plan on spending more this holiday season than last year.
o In 2009, 51.2 percent said they planned to spend less than the previous year while 45.4 percent planned to spend about the same. 3 percent expected to spend more in 2009 compared to the year before.
* Most shoppers still plan to spend modest amounts on gifts. 43.9 percent of respondents are planning to spend between $100 and $500 while 28.7 percent are planning to spend between $500 and $1,000. In a true turn toward austerity, 16.4 percent said they plan to spend less than $100 in total on gifts this year; conversely, 11 percent plan to spend more than $1,000.
o Last year, 47.9 percent said they planned on spending between $100 and $500 in total, 30.8 percent planned on spending between $500 and $1,000 and 11.4 percent said they were going to spend less than $100, and 9.9 percent planned on spending more than $1,000.
* The majority of respondents (77.8 percent) are planning to pay mostly or completely by cash compared to 17.3 percent who plan to pay using a credit card. 4.9 percent plan to use savings from a Christmas club account or other means.
o In 2009, 75.6 percent said they planned on paying all or mostly by cash compared to 11.8 percent who planned on paying all or mostly by credit card. 12.7 percent said they would pay with savings from a Christmas club account or other means.


Credit Union Data Shows Continued Trend Toward Savings

In addition to the consumer poll, GCUA compiled data from 39 credit unions from across the state representing 90 percent of credit union assets and 82 percent of members in Georgia to gauge current lending and savings trends. The data compare year-to-date figures from the first nine months of 2010 to the same period in 2009. Summarized below, the findings indicate a continued trend toward savings among consumers, while figures for lending varied (all rates are annualized):

* Compared to the same period last year, savings deposits grew by 6.3 percent during the first nine months of 2010 and by 7.1 percent over the past year.
* Checking account balances increased by 11.4 percent between January and September and by 16.5 percent over a 12-month period.
* Money market account balances grew by 23.8 percent during the first three quarters of the year and by 35.6 percent over the previous 12 months.
* New vehicle loan balances decreased by 9.7 percent over the past year; however, balances for used car loans increased more than 7.7 percent in the first nine months of 2010, and 10 percent over the past 12 months.
* First mortgage balances increased by 5.8 percent during between January and September and by 12.5 percent over a 12-month period.
* The number of bankruptcy filings among members rose by 13.8 percent over the past 12 months.


"Credit union members represent a good cross section of middle-class Georgians," Mercer said. "Our latest report shows that Georgia consumers seem to be settling into a routine of conscious saving and cautious spending."

More information is available at www.georgiacreditunions.org or on www.facebook.com/creditYOUnion.

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The Return of the Holiday Layaway

/PRNewswire/ --Layaway may sound like an old-school concept, especially in today's "buy now, pay later" society. But the idea of setting aside products to pay for gradually is making a comeback, and is a great alternative to using credit cards this upcoming holiday season.

"The credit card allows shoppers to buy on impulse without the immediate worry of how to pay for their purchases," said Dorothy Guzek , GreenPath Debt Solutions financial counselor. "Unfortunately, when the credit card bill comes due, consumers are left with a surprise balance they can't afford to pay, because they forgot to keep track of each purchase."

Layaway may be the answer for those who can't afford to pay all at once or who simply want to avoid using credit cards this holiday season. An added benefit is that layaway helps keep prying eyes from gifts and presents before the big holiday celebration.

"Our customers are looking for ways to better manage their spending, while still getting the items they need and want," said Salima Yala , Divisional Vice President of Financial Services for Sears Holdings. "Layaway is a financial tool, much like an interest-free payment plan, that allows them to pay over a set period of time."

In addition to traditional in-store layaway, stores like K-Mart and Sears are offering online layaway programs. Online layaway lets you browse and shop for items on the web, pay over time just as you would with traditional layaway, and then pick up the merchandise in-store.

"Layaway provides customers with innovative ways to shop – and with the launch of online layaway, the younger generation of online shoppers are able to manage their budgets, and shopping needs, in a smarter way," said Yala.

GreenPath Debt Solutions offers the following tips for buying on layaway:

1. Get a copy of the store's layaway policies and staple it to your receipt. You may also find layaway policies on the store's website.
2. Make sure you understand the policies such as schedule of payments, late fee policies, refund and exchange policies, markdowns on sale prices and loss or damage of items while in layaway.
3. Be realistic in what you can afford over time and what you put on layaway.
4. Keep clear and accurate records of payments made (staple them to the original receipt and layaway policy statement) in case you have disputes later.
5. When going to the store to make a payment, use the direct in-out method. Walk into the store and directly to the layaway counter to make the payment and then walk back out to your car. Avoid the urge to shop. Preferably, make your layaway payment online and avoid the stores altogether.
6. Don't forget that, until you pay off the items in layaway, the store has your money and merchandise. If the store goes out of business while you're still paying, you could be out both the cash and goods. So only deal with reputable businesses.


Other stores offering layaway this holiday season include Sears, T.J. Maxx, Burlington Coat Factory, Marshalls and Toys R Us, among others. You many find more stores by searching the Internet.

GreenPath's Guzek reminds shoppers, "Regardless of how you decide to shop this holiday season, make a budget in advance, shop from a list, track your expenses and stick with your original plan."

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Is Your Spouse a Secret Spender?

/24-7/ -- The success of a marriage may not be directly affected by a couple's financial situation, but according to recent polling, it is a factor. According to PayPal, which holds an annual survey in Australia, Canada, Italy, Mexico, the Netherlands, the United Kingdom and the United States, nearly a third of all the couples surveyed (and 43 percent of all American couples), state that the recent worldwide recession has led to an increase in arguments.

Of all couples surveyed in the United States and Mexico, 14 percent admit to ending a relationship because of money, and in the United States, nearly a quarter of all couples (23 percent) have hidden purchases from their partner. It is a combination of these factors, made even more stressful by the increased financial instability since the PayPal survey last year, that may cause couples to look for signs that partners are being less than truthful about spending. Geoff Williams, the co-author of "Living Well With Bad Credit", writing at WalletPop, outlined 10 signs your spouse may be hiding spending from you.

- Unexplained items around the house. Do new items suddenly appear around the home with no explanation? It could be that your spouse made a purchase, but is hoping you don't notice, or, if you do, that you accept the flimsy explanation about their origin.
- Spouse is secretive about money. A spouse who demands to keep finances separate, even as little as a joint checking account, could be a sign that your spouse's finances are not in as good condition as they should be.
- Spouse receives a "dock" in pay. If your spouse comes home from work claiming to have received a dock in pay, but you've never seen the paycheck that shows it, the possibility exists that there was no dock in pay, and your spouse is simply keeping the "lost" money.
- Spouse is eager to get the mail. Has your spouse suddenly become extra interested when the mailman delivers the mail? It could be because an extra credit card bill is in there, extra purchases are being shipped to your address, or that your credit card bill contains extra charges you aren't supposed to see.
- Spouse applies for credit card in your name. One sign you and your spouse need immediate financial help is when your spouse applies for a new credit card in your name. Definitely a red flag that someone's finances are completely out of order.
- Receiving collection calls from unknown creditors. Calls from collection agencies aren't uncommon, but what happens when you answer a call regarding a credit card or debt you know nothing about? Time to see what purchases have been made without your knowing.
- Spouse starts paying less on monthly credit card bills. A spouse who suddenly starts paying the minimum could mean your finances aren't as healthy as you thought. Sometimes this is because the extra money is going to new purchases, or to pay off purchases you know nothing about.
- Grocery bill grows unexpectedly. With today's supermarkets becoming more like shopping malls, the grocery bill that unexpectedly balloons could be from non-essential impulse purchases made in the checkout line.
- Spouse is "extra" nice. Always the stereotypical response to having done something "bad." In some cases your spouse put a ding in the car, but other times you might be being buttered up to break bad news about extra debt.
- Spouse handles all the bills. Couples should really share in everything, and so when your spouse offers or demands to take care of the bills without your help, it could be a sign that the bills are out of control, and the spouse doesn't want you to know.

Of course, any of these signs could have nothing to do with poor finances or secret spending. But add up too many of them, too close together, and there could be a problem. So, while money troubles might not be the prime factor in divorces, distrust certainly is, and so everything ties together. Extra spending, secrets and distrust are a bad mix, so cutting off this pattern of behavior before it gets too common is the key to keeping your marriage intact and your finances in good shape.

Article provided by Jeffrey W. Goldblatt Law Office
Visit us at www.jgoldblattlawfirm.com

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