What's New
Sixty-eight percent of Americans said that Santa will be less generous this Christmas because of economic pressure, according to a WalletHub survey.
Not only are the 210 people surveyed anticipating fewer presents this year, more than half of Americans are still in debt from last holiday season. Fifty-two percent of respondents said they will sign up for a new credit card for the holidays, and three out of four Americans have had their charitable giving affected by inflation this year.
Why It Matters
A study from the New York Times in 2023 found that the winter holidays are still the busiest time for the economy, with more retail spending than the rest of the year.
However, "when this pattern breaks," the study explained, "something has gone awry." For example, holiday spending went down in December 2008 but was not affected by the pandemic economy in 2020 when people still spent money on holiday shopping.
What To Know
According to a McKinsey study on December 11, while consumer optimism this holiday season is the highest that it has been since the outbreak of the COVID-19 pandemic, people are still planning to save money and not splurge on luxury items.
Insight from Price Waterhouse Cooper (PWC) supported the idea that although people are nervous about their holiday spending, they will likely still spend more than they do the rest of the year.
PWC's Holiday Outlook Survey found that overall spending is projected to increase by 7 percent to an average of $1,638 per shopper.
PWC also saw generational differences in this year's holiday spending. Its survey found that Gen Z and millennial shoppers are more likely to shop sustainably, to buy gifts for themselves, and to choose purchasing experiences over physical goods.
Gen X and baby boomers, on the other hand, are more likely to give gift cards as presents. They are also more likely than younger shoppers to shop in physical stores.
Even though Americans are expressing economic anxiety around the holidays, more than 70 percent of people told WalletHub that holiday shopping is "worth it."
PWC's Holiday Outlook Survey said: "brands will have to focus on strategic pricing and promotions as they ramp up their investments in innovation and focus on efficiency and cost reduction.
"From a market positioning standpoint, brands with more exposure to lower income consumers will have to focus on price to drive growth, while companies catering to higher income consumers will have more flexibility."
What People Are Saying
Band of America Securities senior U.S. economist Stephen Juneau: "A healthy labor market, inflation moving in the right direction, and real wage growth are all positive for the holiday season."
What Happens Next
Consumer reports after the holidays will provide better insight into how people actually spent their money this year.
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