We will spend $9 billion on Halloween and that bodes well for our GDP
The talking heads are using Halloween to out-scare each other with their market predictions. And as we approach Halloween, the fittingly named investor fear index (the VIX) is being scrutinized like never before.
But with this year’s Halloween week also bringing investors a slew of economic announcements – principally the Consumer Confidence Index, third quarter GDP growth numbers, the Fed’s rate decision, and the Employment Situation Report – let’s examine how much we spend annually on Halloween. The numbers might surprise you.
Halloween is Big Business
According to the National Retail Federation, Americans will spend $9 billion on Halloween in 2019, including:
- $3.2 billion on costumes
- $2.7 billion on decorations
- $2.6 billion on candy
This year’s total is expected to be the third-highest in the survey’s 15-year history, after the record $9.1 billion set in 2017.
Further, the NRF says that 7 in 10 consumers will celebrate Halloween and spend an average of about $86.27 per person, with men skewing that average to about $104 each vs. women.
And while consumers will spend $3.2 billion on costumes, there are about 29 million people that plan to dress their pets in costume this year.
Why Does It Matter?
The U.S. Department of Commerce reported on September 29, 2019 that:
- Personal income increased $73.5 billion (0.4 percent) in August, according to estimates released by the Bureau of Economic Analysis
- Disposable personal income increased $77.7 billion (0.5 percent)
- Personal consumption expenditures increased $20.1 billion (0.1 percent)
Further, the Department of Commerce reported that real gross domestic product increased at an annual rate of 2.0% in the second quarter of 2019, after a 3.1% increase in the first quarter of 2019.
This matters because consumer spending is responsible for about 2/3 of the U.S. economy. And strong consumer spending has been the primary reason that the U.S. GDP growth rate has been in the very robust 2-4% range.
Between a bunch of corporate earnings and a lot of economic data being released during Halloween week, investors might need the late-week sugar break to keep it all in perspective.