US consumers buying less expensive gifts

Shoppers doing more bargain and hunting for deals Fewer people using home broadband in US

NEW YORK, Dec 21, (AP): Cheap is the new chic for holiday gifts.

Jana Montero, who has in the past bought loved ones iPods and tablets for Christmas, has changed her attitude about gift giving: This holiday season, she’s grabbing candle sets and serving dishes that cost under $30 to give to family and friends.

Montero, who lives in New York and is saving to buy a home with her husband, said: “We want to make sure we’re conscious of what we’re spending.”

More holiday shoppers are expected to be like Montero this holiday season in the latest twist in a theme that has played out since the recession. For nearly a decade, shoppers have been more cautious and practical about their spending, doing more bargain shopping and hunting for deals. But recently, shoppers have taken that practice a step further.

They’re becoming more open to buying gifts that in the past might have been considered downright cheap. So, they’re not just looking for big discounts on extravagant, expensive designer and brand name goods; they’re starting out with the intention of getting less expensive items that they might not have considered buying as gifts in the past.

The number of people willing to buy gifts during this holiday shopping season for under $10 rose to 4 percent this year from 1 percent last year, according to a survey of 1,000 people by America’s Research Group, a firm that researches consumer behavior. Meanwhile, the number of people willing to spend between $26 and $35 fell to 18 percent from 22 percent.

Overall, people are expected to spend modestly more this holiday season. The National Retail Federation predicts holiday spending in November and December will be up 3.7 percent to $630.5 billion this year, slower than the 4.1 percent growth during the same period last year.

Cheap

The shift in attitude toward cheap is partly rooted in economics, says Jeff Green, a retailing consultant based in Phoenix. Shoppers who vigilantly watched their budgets during the recession continue to feel the pressure of keeping tabs on what they’re spending even as the economy improves. “Even with the unemployment rate down, I don’t think people feel secure in their jobs,” he says.

But it’s also rooted in a change in consumer psychology. Some shoppers have become suspicious of retailers who continually slash prices, retail consultant Paco Underhill says. In other words, people are beginning to question whether they’re paying too much for the gifts that they’re buying, so now they’re starting out with the expectation that they’ll buy really cheap items.

For example, Stacy Roberts saw plenty of sales when she visited The Fashion Mall at Keystone in Indianapolis on Saturday, but she wasn’t impressed. She said shoppers need to start following the price of something they want to buy for the holidays a few months beforehand, so they can tell if the sales are truly a bargain.

The growing willingness of holiday shoppers to spend less on gifts has made storeowners more conservative as they’ve stocked up for the holidays. Many have more lower-priced merchandise on their shelves to cater to the growing prevalence of cheap-gift buyers. Shoppers walk beneath the Christmas lights on Carnaby Street in central

London on Dec 20, on the final shopping Sunday before Christmas. (AFP)

Continued from Page 30 than a year ago — even while the country feels the financial strain of lower oil prices and sanctions. Others including China, Vietnam, Oman and the North Sea producers have also been able to boost output.

Nevertheless, US production, which has been the largest source of non-OPEC supply growth in recent years thanks to the shale oil revolution, has clearly declined over the last 6 months. According to weekly estimates provided by the US Energy Information Administration (EIA), production fell from a 44-year high of 9.6 mb/d last June to 9.2 mb/d as

of Nov 27, a drop of 400,000 b/d, or 4.0%. (Chart 6.) This has come amid cutbacks in capital spending by oil majors and reductions in drilling activity that have seen US oil rig counts plummet by more than 65% since reaching a high last October.

The IEA forecasts US shale production to decline by nearly 0.6 mb/d in 2016, which is a fall of more than 10%. Shale production accounted for at least 57.0% of total US crude production in August. The agency expects total non-OPEC supply growth to therefore reflect this in 2016 and fall by 0.6 mb/d. This would also reverse the increase in supply, of 1.3 mb/d, that is expected to occur in 2015.

On the demand side, the IEA expects the temporary boost to crude

demand provided by low oil prices and better-than-expected macroeconomic fundamentals in 2015 to prove transitory and global oil demand growth to ease back to its long-term trend rate in 2016. Thus, after reaching a 5-year high of 1.8 mb/d in 2015, the agency is forecasting that demand growth will decelerate to 1.2 mb/d in 2016.

With crude supply growth expected to tighten to a greater extent than demand growth in 2016, the ‘call on OPEC crude’ is projected to increase to 31.3 mb/d next year, according to the IEA. This is a rise of 0.2 mb/d from the agency’s last projection, bringing the call closer to OPEC’s current output of 31.4 and portending somewhat tighter market conditions than in recent months.