Americans don’t seem concerned about holiday spending. An October Gallup poll reported that we intend to spend 6-8% more on holiday gifts in 2022. The average of $932 was just $10 off the 2019 high of $942. Just over half plan to spend about the same amount as last year, while 17% plan to spend more and 26% plan to spend less.
This is somewhat surprising given that consumer confidence inched up at the end of 2022 but still rivaled 1980 levels. Inflation slowed and unemployment dropped in the third quarter of 2022, but inflation remains well above average. The Federal Reserve has increased its interest rates six times this year with another hike expected before the end of 2022. Companies, including retailers usually adding holiday employees, announced layoffs throughout the fall, and the National Retail Federation expected seasonal hiring to decrease by 10-33% relative to 2021.
A Deloitte study produced results similar to the Gallup poll, noting that after inflation, that money is expected to buy nine gifts rather than last year’s 16. Holiday spending plans are rosier than expectations for household financial expectations for 2023 in the Deloitte data. Holiday spending tends to trend with November unemployment and consumer sentiment (see chart). Holiday spending is a reflection of 2022 experiences as much as 2023 expectations. But, really, no one wants to give up holiday memories, many of which include gifting.
In other news, don’t forget to turn in your Ag Census form. Might be a fun way to spend time waiting for the kids to go to sleep on Christmas Eve or between bowl games. Filling it out while contemplating year-end business spending may economize on your holiday time.
Author: Rebekka Dudensing
Professor and Extension Specialist, Associate Vice President for Economic Development and Community Impact
Photo by Ron Dauphin on Unsplash
Duddensing, Rebekka. “Strong 2022 Holiday Spending Reflects Experiences and Expectations.” Southern Ag Today 2(52.5). December 23, 2022. Permalink