The new school year is under way and with it comes the task of buying everything a student will need.
While some school supplies are last-minute purchases, retail industry surveys show that many parents began their back-to-school buying shortly after the last school year’s report cards were issued.
In fact, more than 20 percent of K-12 parents were shopping for the Fall 2015 semester more than two months before school’s opening day. The longer buying period also allows them to spread out the cash drain on the family budget. Additionally, at least 18 states offered tax free weekends in late July and early August where buyers didn’t have to pay state sales tax on specific back-to-school items.
A contributing factor to the back-to-school sales surge is that consumers are leading overall U.S. economic growth, according to a recent PNC economic report. Households are in a spending mood, thanks to solid job growth of better than 200,000 per month. Overall, PNC expects economic growth of about 3 percent for the full year.
“Consumer confidence is definitely better now than this time last year,” said Stuart Hoffman, PNC’s chief economist. “People’s homes are worth more, their stocks are worth more. People’s incomes are up and gas prices are down compared to when students went back to school last year.
“The pattern of consumer spending has been downplayed in the media because we have these strong months and then we have kind of a weak month,” Hoffman added. “When you average out the last five months, consumer spending was pretty darn good. I think if you look at the backdrop, you have many more parents employed now than you did a year ago.”
On average, more than half of the parents with school-age children plan to spend more on supplies this year than last year – with mothers making most of the decisions by the way.
Elementary and secondary school parents expect to spend on average nearly $900 per child, while those with students in college will spend more than $1,100. Included in those numbers are nearly $400 per K-12 student on technology purchases and nearly $300 in clothing.
There are other hidden back-to-school costs not covered in typical retail surveys. What the surveys don’t include is money spent for things like required student medical checkups, the cost of school books and activity fees.
Back-to-school shopping means billions of dollars in sales for U.S. retailers. But, consumers are being very careful about how and where they’re spending their money, Hoffman said.
Shoppers are looking for discounts and deals when they decide where and how to make their purchases. Additionally, more buyers are doing price comparisons online before making any shopping decisions.
Stuart Hoffman says consumer spending is solid overall
Source: U.S. Department of Education
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