A Tale of Two Christmases: Special Holiday Edition

CHICAGO, Nov. 9, 2010 /PRNewswire/ -- The Holiday Outlook this year points to two very different Christmas tales: the haves are cozy and warm while the have-nots are left out in the cold. A survey by the Pew Research Center shows the top 45% shaking off the recession and opening their wallets, preparing to spend lavishly this year on themselves and others. The bottom 55% are still struggling, held back by persistent unemployment and a still-weak housing market.

Overall retail sales totals are expected to meet in the middle, rising 5.1% from a low base. "We expect total retail sales to rise 5.1% from a year earlier, the strongest pace in four years," says Mesirow Financial's Chief Economist Diane Swonk.

View a video featuring Diane Swonk discussing the November issue of Themes on the Economy®. Read this month's issue.

In her November newsletter, Swonk provides her holiday outlook against the backdrop of an uneven recovery:

• "Members of upper-income households, in particular, are expected to loosen purse strings and increase discretionary spending for both gifts and themselves, while middle- and lower-income households continue to stick to necessities," predicts Swonk.
• She forecasts a jolly season for retailers at the high and low ends of the market: luxury retailers and discount stores will ring up more sales while department stores, mid-market eateries and amusement parks will suffer from formerly middle-income consumers trading down.
• Almost half of the hardest hit group say they had to make "major" changes to their lifestyles as a result of the recession.
• The more resilient consumers are older, wealthier and more educated, which no doubt helped to shelter them from the worst job and income losses.
• The saving rate has rebounded fairly sharply; this could act as a tailwind for spending.

Swonk concludes, "The hurdle on holiday spending is easy to clear now that the bar has fallen so low this year, especially for the large number of households who continue to say they must curtail spending just to make ends meet. They will continue to focus more on necessities, like putting food on the table, rather than stacking gifts under the tree."

Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with more than $43 billion in assets under management and 1,200 employees in locations across the country and in London. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its Web site at mesirowfinancial.com.

SOURCE Mesirow Financial

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