An Iowa State University economist says the signs are pointing to an average holiday season for retailers this year. Dave Swenson says all of the analysis he’s seen doesn’t predict any big swings in shopping.
“Most people who are looking at the Iowa economy say it’s looking steady and a lot like last year,” Swenson says, “we continue to improve and incomes have gone up, and by all measures then you should expect a conventional holiday season.”
The good news is the economy hasn’t gotten worse compared to last year, but the improvement isn’t setting any records. “There’s not part of the Iowa economy that’s booming. There’s no special part that is really showing well. Because of that, there’s really not a lot of expectation for there to be a strong growth in holiday spending beyond the growth in just regular household income,” according to Swenson.
Swenson says it does appear though that the urban areas have an edge over rural areas economically. “The farm sector is weaker because of low crop prices and the multiplied through consequences of that might mean that there are parts of the economy that aren’t doing as well,” Swenson explains. “We know that communities that depend on manufacturing jobs and those types of things aren’t doing quite as well metropolitan areas which are enjoying consistent, both employment, population and income growth.”
One thing that is making an impact across the economy in the state is the drop in gas prices. He says the savings at the pump translates into a pay increase for households. “Compared to a year ago, it’s significant,” Swenson says. “Now, how much that increase is as a fraction of your household income — it isn’t that much — gas prices have more of a psychological than a significant effect for most families. But it will put more money in our pockets and more disposable income and greater opportunities for purchases. We can afford to do just a little bit more at the holiday season, but not that much more,” Swenson says.
Milder temperatures and lower heating fuel costs have also save Iowans some money on utility bills. “Every little piece on energy savings — whether its in your utility bill or if it’s gas being pumped into your car — every little savings is a boost to your household income. And it’s one of the few boosts to income we’re getting,” Swenson says. He says that boost helps in a time when wages have stay pretty flat.