Despite the grim economic outlook from Americans, they're ramping up their holiday spending plans, with an estimated average of $975 per person this year – a 100-dollar increase compared to last year. These spending plans aren't adjusted for inflation.
This holiday spending surge could be due to various factors. For instance, many Americans remain committed to celebrating traditional holidays like Thanksgiving, Christmas, and Valentine's Day. These cultural events often involve splurging on food, gifts, and experiences.
Credit card usage also plays a role. The rise in new credit card accounts and increased credit card debt suggest that consumers are still spending, albeit in the short term. The convenience and allure of credit cards often outweigh economic concerns, enabling some consumers to enjoy holiday experiences.
On special occasions like Valentine's Day, Christmas, and birthdays, emotions can drive spending. Individuals may be more willing to invest in their loved ones to create cherished memories or express affection through gifts.
Additionally, there's a segment of the population that remains optimistic about the economy, expecting an improvement in the next year. This optimism, especially among Republicans, could boost spending as consumers look forward to better financial prospects.
Inflation and potential tariffs might also influence some consumers. The anticipation of tariffs and their impact on prices could prompt some individuals to buy now to avoid higher prices later – a phenomenon known as "pre-buying."
All these factors come together, creating a fascinating scenario where holiday spending persists despite unfavorable economic sentiments. It's a complex interplay of tradition, convenience, emotions, and financial outlooks.
