Holiday spending expected to increase this year

Despite inflation consumers are planning to spend around $830 on average on gifts and holiday items, according to the National Retail Federation. 

COLUMBIA, S.C. (WOLO) – Despite inflation consumers are planning to spend around $830 on average on gifts and holiday items, according to the National Retail Federation. 

The NRF also reports a record 196 million Americans shopped in stores and online during Thanksgiving through Cyber Monday and more are expected to continuing during the holiday season. University of South Carolina Research Economist Joseph Von Nessen says its because American households are in good shape financially.

“Over the past two years not only did we see a rapid recovery of the labor market which meant that people went back to work and have been earning wages but because of the $6 Trillion in federal stimulus that included stimulus checks and a variety tax credits – you put those two together and that’s benefited households significantly,” says Von Nessen. 

Von Nessen says thanks to inflation shoppers are having to look for bargains. “The good news however from that perspective is given that they are looking for bargains this year they have more inventory and more choices. If we remember last year many goods were in short supply because we were really still struggling with supply chain constraints as an ongoing effect resulting from the pandemic and that’s not the case this year.”

Consumers are the main drivers of the US economy and people will have to wait to see if this trend continues into the new year. 

“It gives us a sense of whether the economy is going to continue to grow in 2023 or whether we’re likely to see a mild recession which many economist are forecasting because of rising interest rates that we’ve seen all year and the continued high inflation that most Americans are experiencing. So consumer spending and whether that stays steady or whether it declines in 2023 is an indicator that we need to continue to watch,” says Von Nessen. 

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