Multimedia Reporting (Noland-Volek)

’Tis the season for a more money-saving holiday shopping experience. The current state of the U.S. economy has consumers concerned this holiday. Gas prices, the worth of the U.S. dollar, and the state of the housing market are all factors in the U.S. economy and may cause holiday shoppers to spend less this year.
Wally Meyer, director of the University of Kansas Center for Entrepreneurship, said when it comes to gas prices, the demand is much higher than the supply. He said he wouldn’t be surprised if by 2008, gas prices reached $4 a gallon. Meyer said the housing market has a major effect on the economy because if people aren’t buying houses then they aren’t buying furniture and they aren’t remodeling.
“It’s a trickle down effect. Because the housing market suffers, so do other businesses,” Meyer said.
The media may also have an effect on consumer spending this season, Meyer said. The media plays an important role in consumers’ lives and can cause people to be more cautious in their holiday spending.
Inayat Noormohmad, the senior labor economist at the Kansas Department of Labor, said Kansas experienced a 1.5 percent increase in employment compared with the national average of 1.2 percent. The Kansas economy has grown over the years and has been doing better than the U.S. economy, Noormohmad said. He said this may suggest more people in Kansas are earning wages and that agriculture is doing well and producing a good yield.
“Kansas economy is still doing well, but we will just have to see if people will spend more or less this year. Consumer spending is very difficult to predict,” Noormohmad said.

Some store owners in downtown Lawrence feel optimistic when it comes to the state of the economy. Mark Swanson, the owner of Hobbs, said the store’s “traffic count” has been good so far and he anticipates it will go up from last year.
Swanson said he believes the experience for the customer is what matters the most. He said if you price it well, have an exciting product, and value the customer, then customers will come.
“We’ve already had enough doom and gloom this year, so this is a great time of the year and should be a fun experience for the consumer,” Swanson said.
Wes O’Neil, a store manager from Sunflower Outdoor, agrees that business seems to be up so far this year. O’Neil said he predicts the store will have more sales this year than last year. He believes part of its success may be because of a bigger emphasis on going outside, being healthier, and riding bikes more often.
Joe Flannery, the president of Weavers has a slightly different take on this holiday season. Flannery said he has already seen consumers being more careful in their spending. He believes the slow housing market and high gas prices will make business a bit more difficult. Flannery still predicts Weavers will do well this year and hopes to sell more than last year. Flannery isn’t sure there would be much he could do to get people to buy more.
“Customers have a set limit to spend and they only go to their favorite holiday stores,” Flannery said.
Hallmark is another store that sees more sales because of the holiday season. Jennifer Holmes, the store owner, said she has already seen a major increase in sales. Holmes said she believes this increase is because the only other Hallmark store, off in Lawrence closed down in October.
Holmes said if the economy does affect consumer spending, she believes people will take fewer trips to the store because of gas prices. People may be wary, but Holmes still predicts their store to do much better than last year.
Retailers aren’t the only ones concerned this year. According to the Conference Board, the Consumer Confidence Index shows a decrease in consumer confidence. The report is based off a representative sample of 5,000 people. Consumers were asked to assess the present conditions of the economy. From Oct. to Nov., those who said the present situation was bad increased from 16.6 percent to 19.1 percent.
Local consumers are beginning to feel the effects of the U.S. economy. Denise Johnson, a local consumer, said she will be spending less this year because they are trying to cut back. Johnson said it really had nothing to do with gas prices, but that they just wanted to cut back on clothes and things like that.
Linda Mullens, another local consumer, said she plans to spend about the same as she did last year. She said she has a planned budget each year and is pretty conservative in her spending. Mullens also said she shops only around downtown Lawrence and South Lawrence. She said she tries to get all her shopping done in Lawrence because shopping in Johnson County can get too expensive.
“In a nutshell, things don’t look good, but they actually may be better than they look,” Meyer said.
Economists have a hard time predicting consumer spending, but understanding where the economy stands can help consumers determine whether or not they need those money-saving tactics this holiday season.