People lavish attention on their loved ones on Valentine’s Day. But they are spending less in 2017. Valentine’s Day will contribute $18.2 billion to the economy, according to the National Retail Federation. That’s lower than the record $19.7 billion spent in 2016. It’s also less than the $18.9 billion spent in 2015, and the $18.6 billion spent in 2013. It’s more than the $17.4 billion spent in 2014.
That’s not good news for the economy. Consumer spending drives almost 70 percent of economic growth, as measured by gross domestic product. That’s crucial this year because business spending has been declining. The latest GDP report shows that the strong dollar has hurt exporters, most of whom are manufacturers. That means the consumer must spend more to keep America’s economic engine running. For more, see Components of GDP.
Why Is Spending Down?
The number of people who celebrate Valentines’ Day have been falling since 2007. Only 54 percent celebrate the holiday, fewer than the 54.8 percent who celebrated it in 2016. That number has been declining since the record of 63 percent in 2007.
That’s because the number of older people in the population is rising. They are less likely to celebrate Valentine’s Day. Younger people, who still try to impress potential mates, participate more than older, more settled folks.
Nearly two-thirds of those between 25-34 celebrate the holiday, and 60 percent of those between 18-24. Less than half of those between 55-64 celebrate, and only 44.7 percent of those 65 and older.
They are also spending less. Those who celebrate Valentine’s Day spend $136.57 each. That’s down from the $146.84 each spent in 2016 and the $142.31 spent in 2015.
That reflects the trend toward greater U.S. income inequality since 2000. Those who derive income from stocks, bonds, and other investments have prospered more than wage-earners. Also, well-paid manufacturing jobs have gone to low-cost countries like China. Firms replaced workers with robots in other jobs.
Top 5 Valentine’s Day Purchases
More people shop for less expensive gifts, proving the adage that it’s the thought that counts. Here are the top five gifts and the percent who buy them:
Greeting Cards 47%
Evening Out 37%
The least favorite gifts are also the least romantic. Only 19 percent buy clothing, spending $1.9 billion. Sixteen percent buy gift cards, paying $1.4 billion.
Where Do They Shop?
The economy is improving for Valentine’s Day shoppers. For the first time, more visit department stores (35 percent) than discount stores (32 percent). Almost 18 percent go to greeting card stores or florists. Just 11 percent shop at jewelry stores. Retailers have stocked the shelves with deals in anticipation of value-conscious shoppers.
Mobile Devices Use Is on the Upswing
Just like Black Friday and Cyber Monday, shoppers use their mobile devices to share the love on-the-go. Half of smartphone or tablet owners use them to research products, prices and retailer information. They also redeem coupons and purchase products with their device.
As NRF President and CEO Matthew Shay concludes, “Valentine’s Day continues to be a popular gift-giving occasion even if consumers are being more frugal this year.” (Source: “NRF Says Consumers Will Spend $18.2 Billion on Valentine’s Day,” National Retail Federation, February 2, 2017.)
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Source: The Balance (https://www.thebalance.com/)