U.S. consumers might spend 6.5 percent more during the holidays than a year earlier as lower gasoline prices and a jump in the stock market encourage buying, accounting firm Ernst & Young LLP said.
Demand for Apple Computer Inc.'s iPods and high-definition televisions will drive spending in November and December, the firm said. In 2005, holiday sales increased 6.7 percent, the firm said in a release yesterday.
The season accounts for a fifth of sales at retailers such as Wal-Mart Stores Inc. and Federated Department Stores Inc. and is the most profitable period for most stores. U.S. shoppers enter the holiday season amid declining gasoline prices, gains in income and spending and with unemployment at a five-year low.
The 6.5 percent forecast is “growth off of a good year last year,” said Jay McIntosh, the director of the firm's consumer-products practice.
Spending may be limited by falling home values, which have discouraged Americans from raising cash by refinancing their mortgages, McIntosh said.
