Cupid shoots arrow into consumer spending

9:40 PM, Feb 15, 2012   |    comments
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Americans spent $17.6 billion on Valentine's Day this year, second only to Christmas in consumer spending, according to the National Retail Federation.

Overall spending was up 8.5 percent over last year, with the majority spent on spouses on items like flowers, candy, gift and greeting cards and jewelry. The average person spent just over $126, with men outspending women nearly two to one.

Although $17.6 billion may sounds like an exciting boost to the economy, the number is actually a very, very small percentage of overall consumer spending.

"It is a drop in the bucket in a way but something is better than nothing and right now it looks like anything is good for us as far as increasing spending is concerned," Metro State College Economics Professor Dr. Kishore Kulkarni said.

He says consumer spending accounts for about 65 percent of the overall $15 trillion GDP, so around $9.75 trillion a year. If you do the math, that leaves this year's Valentine's Day at less than two-hundredths of a percent.

"It is a small step and hopefully we take a lot more steps for the economy to rebound," Kulkarni said.

Kulkarni says although the spending bump is nominal, any positive reports may boost the confidence of corporate leaders and investors.

"As a businessman I definitely like to see this kind of thing happening because higher spending gives a better idea for businessmen to go invest some more in the future," Kulkarni said. "That is a positive sign. If you think this is a small step, try a negative alternate. That clearly gives a very pessimistic feeling to the businessmen so this is definitely a better step."

To read more Valentine's Day spending reports from the National Retail Federation log onto their website: http://www.nrf.com/modules.php?name=News&id=629.

(KUSA-TV © 2012 Multimedia Holdings Corporation)

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