Does the holiday season help the economy?

Economists and average citizens alike wonder if  the economy will benefit from holiday shopping.

Senior Lauren Mudrock believes it will.

“I think it [the holiday season] helps the economy because it gets people spending,” Mudrock said. “People are giving gifts, and the economy rises from that.”

Government teacher Kevin Lawrence explained his view that the holiday season does not largely affect the country’s overall economy.

“The holiday season always spurs spending across the economy,” Lawrence said. “This is not significnt because it happens annually. What’s most significant is how [spending] compares to past years.”

Some claim holiday spending is helpful, especially to local stores.

Smaller stores often rely on holidays, such as Christmas and  Valentine’s Day, to make the majority of their profits. Ergo, more money spent on gifts, decorations, and food means financially helping the local retailers.

Senior Emily Cox prefer shopping at large retailers rather than local stores.

“They [large reatailers] tend to have more variety in what they offer,” Cox said.

Others argue that with so many Americans in debt and store prices rising, holidays only add to financial strain. They point out that money that could be put toward more useful causes is being spent on decorations and presents.

Contrary to this belief, the Ernst and Young Bureau for Economic Research found in a survey that people would be spending more on practical merchandise like food and clothes during the 2012 holiday season. What people buy as gifts makes a difference to individual companies, but not on the economy as a whole.

“If everyone wants to get the new Barbie, the Barbie business will be happy, but the Slinky company will be sad,” Cox explained.

Many people appear to be more frugal this season. According to a survey by Deloitte’s, over 50% of respondents said they would be relying less on credit. They plan on using cash, loyalty points, and debit.

Lawrence said that he has friends in banking, real estate, and small businesses who have shared insights with him.

“They all tell me it’s [the economy] starting to come back,” Lawrence said. “And the early statistics of the season suggest that people are spending more.”

Although it is still difficult to predict, hopefully  this holiday season will benefit the economy.