Real-Time Quote
Page 1 of 3 | Next Page
Show Entire Article

Consumers: New Year's Resolution
CNBC.com | December 01, 2011 | 02:36 PM EST

1. Retailers will start 2012 strong. Retail sales will easily top the industry’s estimate of 2 percent to 3 percent growth for holiday 2011 as consumerstreat their loved ones and themselves. In fact, sales growth will likely be the strongest since 2006 and give retailers something to celebrate as 2012 kicks off.

2. But then comes the post-holiday spending freeze. Shoppers will pick through the after-holiday sales, and then put their wallets away for the rest of the year. Why? High unemployment, high debt loads, rising prices for food and most likely gasoline, as well as stagnant wages means most consumers will be tapped out and it will be time to start saving again. In short, don’t expect consumers to return to their pre-recession, free-spending levels in 2012.

3. Credit cards make a comeback. Credit cards will reclaim their title as the most-used payment method from debit cards. This is a sign of both a healthier consumer and hungrier banks. Debit cards became a popular tool to curb spending, but next year, consumers will show their finances are steadier and pull out the plastic, especially if doing so earns rewards.

Banks will encourage this by making it more attractive to use credit cards and less attractive to use debit. Plus, more consumers will find they’re able to get credit again as banks re-evaluate and re-enter the subprime market.

Page 1 of 3 | Next Page
Show Entire Article
More The Morning Star Investment Conference

Real-Time Quote
omniture pixel