SALT LAKE CITY — The strong economy may help local Halloween revelers enjoy a lot more treats than tricks this Allhallows Eve.
Americans are expected to drop billions of dollars on candy, costumes and other ghoulish goodies for Halloween, according to analysis from IHS Markit, a London-based global information and analytics provider with U.S. offices in Boston. Spending on Halloween candy is forecast to rise 4.2 percent, a bigger jump than last year's 2.4 percent gain, said IHS Markit economist David Deull.
"We forecast Americans to scare up $2.5 billion to spend on Halloween candy this year, the most ever, which would spell $20.10 per household," he said.
Halloween candy prices this October are expected to rise amid the specter of a global sugar price surge, he added. Price increases for the goodies were "frightful" between 2005 and 2011 when they rose by more than 2 percent each year, he noted. However, inflation for sugary treats has only been at 1 percent or less in five of the six years from 2012 and 2017, he said.
"For the past two Halloweens, candy prices have been underwater — much to the delight of little witches, goblins and ghosts," Deull said. "We expect Halloween candy price inflation to rise from the dead. The global price of raw sugar has swollen 40 percent over the last month, thanks in part to declining Brazilian production."
Additionally, large cocoa bean supplies are putting downward pressure on cocoa bean prices in the third quarter, he noted. All told, IHS Markit forecasts a Halloween candy price increase of only 0.5 percent year-over-year — not too scary after all, he said.
"If you take the (2.1 percent) inflation rate (in 2017) into account, it actually costs less in real terms than last year," said Jeff Steagall, dean of the John Goddard School of Business & Economics at Weber State University. "In the grand scheme of your monthly budget, Halloween candy is not a very big expense. So even if it does go up a lot in price, it doesn't cost you a lot of extra dollars to buy it."
He noted, however, higher prices for costumes could possibly impact consumer spending. But even so, revelers will still likely shell out a few extra dollars to create a costume to enjoy the occasion, particularly since the expenditures typically aren't exorbitant, he said.
"It's a lot of fun for not a very high expense," Steagall said. "A few extra bucks for Halloween candy and 10 or 20 dollars extra spent on costumes and makeup isn't that big a deal."
Deull said that candy spending growth in the last several years has been rather volatile, noting that it was moderately depressed in 2012 and 2013 due to extenuating factors including Hurricane Sandy in 2012 and a federal government shutdown the next year. Halloween candy spending jumped in 2014 — rising 6.4 percent while increasing just 3.1 percent the following year.
When 2016 came around, a 1.2 percent decline in candy prices shot spending into dramatically higher — climbing 7.6 percent over the year before, he said.
"That was another hard act to follow and 2017's bare-bones 2.4 percent increase didn't turn any heads around," he said.
Deull said Halloween candy spending this year is likely to be propped up by increased consumer confidence, strong employment markets and growth in real disposable income. However, he also noted that several headwinds have surfaced recently, including volatility in the stock market and creeping gasoline prices that could potentially impact consumer sentiment.
Notwithstanding those possible concerns, positive forces should push Americans to indulge in more treats this year despite the slightly rising Halloween candy prices, he said.
"We expect an animated 4.2 percent year-over-year increase in Halloween candy spending, bringing the total to $2.5 billion," Deull said. "This year, the cost of a treat is going up, but consumers aren't scared."
High consumer confidence and strong disposable income growth mean that consumers will likely splurge on sweet treats for the holiday, he said.
"If candy remains popular and people continue to have a sweet tooth, then that ($2.5 billion) is going to keep going up," Deull said. "By how much is another question."