Despite concerns about the nation’s economy, Americans are expected to spend more than ever this holiday season. Jie Zhang, a marketing professor at the University of Maryland, says consumer spending appears resilient. Holiday spending is anticipated to reach an average of $902 per person—a $25 increase from last year.
The National Retail Federation predicts that overall spending could reach $989 billion in November and December, a 3.5% increase from the previous year. Other forecasts suggest even higher increases, up to 7%, driven by spikes in online shopping and heightened demand for holiday experiences. This year, the traditional holiday shopping period that begins with Black Friday has expanded.
Zhang explains that Black Friday has transformed into more of a concept rather than a specific day, with sales beginning as early as November. Retail giants like Walmart and Amazon have rolled out Black Friday deals early. The stock market has reached record highs, and the labor market remains strong despite a slight increase in unemployment in 2024.
Record highs in holiday spending
Wage growth is also outpacing inflation, enabling higher purchasing power for consumers. However, wealth and income distribution remain highly skewed.
Higher earners, especially those with significant investments in the stock market, are contributing significantly to holiday spending. While many Americans are becoming more price-conscious due to inflation, retailers have expanded their discount offerings. Zhang said, “With inflation squeezing their budgets, many consumers are becoming even more price-conscious and deal-prone.”
After a stressful election year, shoppers are looking to indulge and take better care of themselves.
Zhang noted, “The election has created a lot of stress and anxiety, regardless of political stance. Now that it’s over, there’s a widespread desire for self-care and a bit of self-indulgence.”
This mentality is expected to drive spending increases even in thrift stores and online resale platforms, especially among younger consumers who prioritize saving money and sustainability. The post-election period is also expected to see a 16% surge in spending on holiday experiences like entertainment, dining, and traveling—a continuation of the post-pandemic emphasis on such activities.
Despite economic unease, Americans seem ready to embrace the holiday season with increased spending, supported by strong stock market performance and robust wage growth. As retailers adapt to changing shopping behaviors, the holiday season is set to see record highs in consumer spending.
