Friday Rant: Trick or Treat – Spooky Spending as a Gauge for Recovery

As economists and politicians scour data to forecast rates of economic recovery in a multitude of sectors, they frequently focus on current percentage up ticks on horribly depressed year over year declines. A perfect example is contained in Recovery In Building is Forecast For 2011, an article in today's WSJ that claims: "Next year, the value of new projects that start construction is expected to climb to $445.5 billion, an 8% rise from this year when that figure hit a post-recession low..." When in fact "in 2006 ... there were $689.3 billion in construction starts..." and "McGraw-Hill last year initially forecasted a gain of 11% for 2010 ... but [now] construction starts are estimated to decline 2% from 2009." So in the spirit of this weekend's All Hallows Eve -- if these building forecasts aren't spooky enough already – let's get down in the dirt and see if this year's Halloween spending portends a greater return from the dead.

In April, 2010 Halloween claimed "The average family, who spent about $66 on Halloween related items in 2008, only spent about $56 in 2009." For you statistic geeks out there, that was a 15% drop in spending. And the 2006 – 2007 Halloween spend was only slightly less than 2008 according to BIGresearch back in 2008. This year, the National Retail Federation predicts spending will return to the 2008 level "and total [Halloween] spending will reach nearly $6 billion."

It would appear that Halloween truly raises consumer's spirits. According to, last week's WSJ, a higher percentage of Americans, "68%", buy Halloween decorations compared with "66%" for Christmas/Hanukkah/Kwanza and "34%" for Easter. Even more surprising, Halloween sales of chocolate candy top the stats at "90 million pounds" compared with "65" and "48 million pounds" respectively at Easter and Valentine's Day.

Strangely, last week's WSJ called this year's Halloween spending return to the 2008 level a "22% increase" when the decline from '08 to '09 was 15%. But hey, it's Halloween and the numbers aren't yet final. And -- trick or treat -- maybe Halloween spending isn't any more illuminating than other economic sectors after all.

William Busch

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