Black Friday unofficially kicks off the biggest shopping time of the year. Consumer spending is expected to top last year, but Americans are far from gleeful to be shelling out more due to higher prices.
For the fourth holiday shopping season in a row, inflationary federal policies are placing burdensome financial pressure on American households. With new leadership in Washington, we can only hope that this year will be the last.
By the numbers
The National Retail Federation has released its annual survey of consumers spending plans for the holiday season:
- 183.4 Million: A record 183.4 million people are planning to shop in-store and online from Thanksgiving Day through Cyber Monday this year, 1.4 million more than last year.
- Up 3.5%: Holiday spending is expected to grow between 2.5% and 3.5% (or $979.5 billion and $989 billion) over 2023.
- Up 9%: Online and other non-store sales are projected to increase between 8% and 9% (between $295.1 billion and $297.9 billion).
- Retailers are expected to hire between 400,000 and 500,000 seasonal workers this year down from 509,000 in 2023, the group said.
Consumer sentiment
The American consumer is resilient and expects to spend a bit more this holiday season. However, that doesn’t mean American consumers are not fatigued.
Indeed, Americans are pessimistic about the economy because they have had to deal with over three years of high prices eroding their purchasing power, draining their savings, and making it difficult to get ahead.
The rate of inflation has fallen from 2022 highs, which crested at 9.1% in June of that year. In October, the inflation rate registered 2.6%, still well above the Federal Reserve’s target rate. However, price levels have not returned to their 2021 or pre-pandemic levels.
In surveys, Americans express their dissatisfaction with high prices. A Wall Street Journal national survey, released recently, “shows about three-quarters of respondents believe costs for everyday goods and services outpaced household income in the past year.”
To maintain their quality of life, Americans have turned to credit, but even credit card debt has been worsened by high interest rates on consumer debt. An alarming nearly half (46%) of Americans are still paying off debt from last Christmas, according to a new survey from WalletHub.
Not only are people scarred by inflation and frustratingly high prices outpacing their wages, but they feel their quality of life slipping away. In an interview with Stefanie Stantcheva, an economics professor at Harvard University, she noted that pay increases given to help workers maintain the same standard of living rather than for performance “contributes to the dislike of inflation and the feeling that it erodes your living standards.”
Inflation didn’t appear out of thin air. Multi-trillion-dollar federal spending bills, particularly the last tranche under the Biden-Harris Administration, drove inflation to generational highs. We have yet to see a deceleration in prices.
Inflation and the economy were leading issues on voters’ minds when they re-elected President Donald Trump, who promoted a plan to bring them down. If he can’t make good on those promises to deliver relief, Americans will no doubt hold conservatives responsible in 2026.
Thanksgiving dinner this year is shockingly 20% higher than at the start of the pandemic. American households will swallow these high prices to enjoy the holiday with loved ones. Thanksgiving this year will be another reminder of how Americans’ financial situations have worsened over the past four years. In surveys, Americans express their dissatisfaction with high prices.
Inflation does not appear out of thin air. The biggest culprit was massive, multi-trillion-dollar federal spending bills passed, notably the partisan, leftist-passed American Rescue Plan.