Many Americans tell pollsters they are not happy with the state of the US economy. And yet Americans simultaneously say they plan to ramp up their holiday spending.
Americans now estimate they will spend an average of $975 on Christmas or other holiday gifts this year, up from the $923 average spending prediction in October, according to a Gallup survey released on Wednesday.
That represents a $100 increase from what consumers estimated a year ago and is the highest level since Gallup started tracking this measure in 1999. The spending intentions are not adjusted for inflation.
The findings are hard to square with the latest polls on the state of the economy.
A clear majority – 71% – of Americans rate economic conditions in the country as poor, according to a CNN poll released Wednesday. That includes 38% who rate economic conditions as very poor.
Roughly 4 in 10 Americans say the economy or the cost of living is the No. 1 number one issue facing America, the CNN poll found. That’s far above the share who name any other issue.
Gallup found that during most holiday seasons, Americans lower their spending prediction between October and November. However, that did not happen this year.
“The increase could reflect consumer interest in retailer promotions that kicked off ahead of Black Friday,” Lydia Saad, Gallup’s director of US social research, wrote in Wednesday’s report.
Enticed by record-setting discounts, Americans significantly increased their spending on online shopping on both Black Friday and Cyber Monday, according to Adobe Analytics.
According to Gallup’s modeling, the new holiday spending estimate of $975 suggests holiday sales could increase by between 6% and 9% this season. By comparison, retail sales increased by an average of 6.2% in November-December 2022.
The increase in spending intentions over last year was led by middle-income Americans. Those households – making between $40,000 and $99,999 – say they plan to spend $200 more than last year’s estimate of $709, Gallup said.
There was little change in spending intentions from upper-income Americans, while lower-income Americans dimmed their spending plans to $429 from $477 previously, according to Gallup.
The survey also found that expected spending increased more among women and younger adults (those under 35), compared with last year.
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