The use of debit cards increased in 2005 and is expected to rise even higher this year, according to an economist for Bridgeport-based People’s Bank.

Debit cards will continue to increase in popularity during this year’s holiday shopping season, but concerns about energy costs and debt are making consumers slightly more inclined to reduce their holiday spending this year.

The debit card trend is not new. Last year also saw greater use of the cards, according to Todd Martin, an economist for Bridgeport-based People’s Bank.

“People have enough on their credit card and have been paying with debit or cash,” he said.

But in Connecticut, healthy job growth – the state has added 9,300 jobs from this time last year – and a falling unemployment rate could make overall holiday sales healthier.

“That translates into income growth, and that could generate good holiday spending,” Martin said.

There is a downside, however, in the weakening housing market. The market’s struggles mean that people cannot take as much equity out of their houses, but Martin said he believes that trend could be offset by recent drops in energy prices.

“That should offset some of the weakness in the housing market,” he said.

Nationally, 32 percent of consumers said they will spend less this holiday season, with 15 percent saying they will spend more. About half said they will spend the same, according to a survey from the Consumer Federation of America and the Credit Union National Association.

The percentage of consumers who said they would spend much less than last year went from 13 percent in 2005 to 18 percent this year.

“Our experience with this survey is consumers tend to say they will spend less than they actually do, and our overall survey findings are slightly weaker than last year. This suggests many households will feel financially ‘hung over’ in a couple of months unless they do something about it now,” said CUNA Chief Economist Bill Hampel in a prepared statement.

Holiday shopping has been starting earlier and earlier, according to John Weeks of Waterbury-based Webster Bank.

“Holiday shopping has been an interesting trend over the last three years. It keeps getting earlier and earlier,” he said.

The trend is driven by merchants who want to even out their sales throughout the year, rather than seeing the “hockey stick” graph that typically comes with holiday shopping. In the past two or three years, Black Friday, as the day after Thanksgiving is called, has not been as strong, but sales in October have been up.

So far, 5.6 percent of consumers have almost completely finished their holiday shopping, according to a survey from the National Retail Federation. Most people – almost 70 percent – have completed 10 percent or less of their holiday shopping.

“Many people see Thanksgiving as a signal that it is time to start thinking about purchasing holiday gifts,” said Phil Rist, vice president of strategy for BIGresearch, the firm that conducted the NRF survey, in a prepared statement. “Consumers know that retailers will be rolling out great deals and special promotions on Black Friday weekend, and they use that time to complete a bulk of their shopping.”

NRF continues to project that holiday sales will increase 5 percent over last year, bringing holiday spending to $457.4 billion.

‘A Mixed Bag’

Visa, however, predicts an even larger increase. The company predicts 7.5 percent more spending this year, which is slightly lower than the growth rate of holiday sales in the past two years.

“It’s a mixed bag of indicators this year – lower energy prices, continued positive employment trends and a real estate slowdown,” said Wayne Best, senior vice president of business and economic analysis for Visa USA, in a prepared statement. “This suggests a sustainable holiday shopping season and bodes well for specific sectors like personal entertainment, sporting goods and hobby stores, and specialty retailers or stores commonly found in a mall environment. We also expect this will be a good year for many online retailers.”

Debit will be the choice of many this season, according to the NRF survey. Almost 40 percent of respondents said they would use their debit cards most often when making holiday purchases. That is up from just over 34 percent last year. Just over 30 percent of consumers said they will rely on their credit cards and, for the first time in two years, the number of people using cash to purchase gifts has dropped. More than 24 percent of consumers said they would use cash this year, down from 29 percent last year and 26 percent in 2004. Just over 6 percent of consumers will write checks.

“With full schedules, many people find it hard to carve out time in their day to get their holiday shopping done,” said Tracy Mullin, president and chief executive officer of the National Retail Federation, in a prepared statement. “Time-strapped shoppers enjoy the convenience of debit/check cards when out shopping for holiday gifts, eliminating the need to make an extra trip to the bank or ATM to withdraw money.”

“[Debit card use] goes up every year,” said Sue Murphy, spokeswoman for Middletown-based Liberty Bank. “That’s very predicable.”

That use could go up even more among Liberty Bank customers, because the bank is offering a sweepstakes, through MasterCard, that allows debit users to win a home.

According to Martin, flat-screen televisions, iPods and other electronics will be popular this year.

“We’re looking at another high-tech holiday,” he said. “People are also looking for gift cards to be another big seller.”

Retailers are doing whatever they can to get consumers through the door.

“The competitions’ intense, we’re looking at price wars,” Martin said.

According to NRF, more than 63 percent of consumers plan to buy clothing or accessories.

Books, CDs, DVDs, videos, and video games also remain gift favorites, with 62 percent of those polled planning to purchase at least one as a gift. More than 56 percent of respondents said they would buy gift cards or certificates, 48 percent said they would buy toys, and 33 percent said they would buy consumer electronics. In addition, 30 percent of consumers will include food or candy in their holiday gift purchases.