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No Tricks: Strong Halloween Candy Sales Reflect Economic Strength

What's Your Reese's Pumpkin HSY Telling You About The Economy? Halloween Candy Sales Mirror Economic Strength, Weakness

here are many tools available for investors to gauge the strength of the economy, from GDP, jobs reports and consumer confidence. But here is a unique tool that few know of: Halloween candy sales.

According to a Bloomberg report, the unemployment rate has hovered around the 5 percent mark since last year's Halloween, wages have been rising and prices at the pump are more or less flat.

Heading into Halloween, consumers are more confident and are ready to spend more cash on trick-or-treaters this year. In fact, Bloomberg cited a report from IHS Global Insights that found Halloween candy spending will rise at the strongest pace this year and hit $3.8 billion, up 5.5 percent from a year ago.

In 2014 and 2015, spending on Halloween candy rose 5 percent and 1.7 percent, respectively. Of course, food deflation could play a factor, as Halloween candy is cheaper year-over-year for the first time since 2013.

The report does contrast Alexia Howard of Bernstein who said in a research report that Hershey Co HSY 7.36% is seeing "weakness" in the domestic candy space.

"Overall, real consumer spending has been relatively strong since last Halloween due to modest consumer price inflation, low gasoline prices, better employment opportunities, and improved household finances," Bloomberg quoted Chris Christopher, IHS Global Insights' director of consumer economics as saying.

Bottom line, consumers are paying down debt, saving a little bit more, dining out and spending a few extra bucks on candy.

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