US prepares for slower than usual holiday season

US retailers and those in the travel industry are preparing for what many are expecting to be a slower than usual holiday season, according to Bloomberg .com. The unexpected depreciation in house values and the soaring costs of financing credit are making some people think twice about their spending habits during the holidays. The one silver lining for the travel industry is that AAA has predicted that despite the high cost of fuel, Americans are not likely to give up hopping in their car and going on road trips, or visiting family and friends during the holidays. AAA expects that the number of Americans that decide to drive between Thanksgiving and Christmas will increase by about 1.5% over last year. Although this does not represent major growth, nor is it any comfort to the air travel industry, it does show that US citizens are still willing to foot the bill when it comes to gasoline costs.

US retailers, however, have noticed a downward trend in retail sales and this has been especially true of luxury and high-end companies, like Polo Ralph Lauren which has already decreased its profit forecasts. The housing market in the US is weaker today than it ever was for the past 16 years and as such, home owners are less willing to spend, especially because many find themselves stuck with a high mortgage and a house with a depreciated value. Yet a small handful of large, discount companies still seem to be performing well. Walmart, for example, actually increases its profit estimates ahead of the holiday season.

www.aaa.com