Thanksgiving will officially kick off the Christmas and holiday shopping season across America.
Although Black Friday deals started to populate my email box the day after Halloween, now is the time that many households including mine will begin shopping in earnest.
The big question is how much will American consumers spend this year amidst near-40-year-high inflation, layoffs, skyrocketing rent prices, a plummeting stock market, and economic concerns.
Here are 5 ways this year’s gift-giving and festivity season is expected to be hurt:
- 8 fewer gifts under the tree. Shoppers plan to buy an average of nine gifts this year compared with 16 last year according to Deloitte.
- $35 less on gifts. Individuals plan to cut gift spending to $613 from $648 in 2021 finds The Conference Board, a nonprofit research organization, from surveys of household confidence.
- Fewer dollars to charity. In a survey of 2,000 people, crowdfunding platform Kiva found that many planned to give less to charity compared with last year. A plurality (44%) blamed a lack of funds for their charitable pullback.
- Fewer donors giving to charity. Donations of less than $500 fell in the second quarter according to GivingTuesday, a nonprofit, and the Association of Fundraising Professionals driven by a declining number of donors nationwide.
- Fewer office parties. Given layoffs and hiring freezes, particularly in the tech sector, event planners report that some companies are forgoing big holiday parties. Catering orders for large events and large reservations at restaurants are also down.
Small businesses in America will feel the impacts of spending pullbacks by households and businesses most acutely at the same time they are dealing with rising costs to deliver goods and services to customers.
The consumer price index (inflation rate) rose 7.7% in October overall from one year prior, while the producer price index (inflation rate on producer prices) rose 8%. Both demonstrate a little slowing of inflation, but inflation is still twice to three times as high as it was at the start of 2021.
For charities, a giving pullback paired with inflation leaves fewer charitable dollars to serve greater needs. As I wrote in the Washington Examiner:
Charities across the country are grappling with rising demand for services stemming from the pandemic, rising inflation rates, and natural disasters such as Hurricane Ian. They are also striving to maintain service levels despite high prices of food, goods, and gas that raise operating costs.
The good news is that philanthropic dollars are flexible enough to meet both immediate and long-term needs…
Unfortunately, Washington is considering new giving restrictions that will make it harder for long-term giving.
Why should we be surprised? Much of the inflation we are grappling with now is because of federal spending policies. Liberals in Congress passed nearly $2 trillion in stimulus at a time the economy did not need it causing our economic system to overheat.
Last Christmas, supply-chain disruptions threatened to deliver fewer Christmas presents under the tree. This year, inflation is the grinch.