Another Spending Indicator

My son graduated yesterday:

Spending on Graduates Expected to Drop

Family and friends of graduates this year are choosing to be a little more practical with their gift giving, opting for the versatility of cash instead of gift cards.

According to the National Retail Federation's 2009 Graduation Consumer Intentions and Actions survey, conducted by BIGresearch, 58.9 percent of Americans who will buy for graduates will fill envelopes with cash, up from 56.8 percent last year. Just 29.4 percent will give gift cards, down from 32.2 percent last year.

The survey also found Americans will spend an average of $88.01 on gifts for an average of two students, down from $99.79 last year. Total spending on graduation gifts is expected to reach $3.9 billion.

"Many students will pool graduation money for major purchases like electronics, furniture, and house wares," said NRF President and CEO Tracy Mullin. "Young adults will have tremendous buying power in the next several months."

The survey found other popular graduation gifts to include greeting cards (37.0 percent), apparel (9.9 percent) and electronics (9.0 percent).

"Students often use graduation gifts to stock up for college or furnish their first apartment," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "With graduates receiving less money and smaller gifts this year, many young adults are likely to head to discounters to scout for sales in order to get the most bang for their buck."

While the average amount spent on graduation gifts is projected to be $88.01, consumers in the 45-54 ($101.08), 35-44 ($95.30) and 55-64 ($92.58) age groups are expected to exceed that figure.

(Source: National Retail Federation, 05/14/09)

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