Shoppers will be very tight on their wallets this holiday shopping season, with 41% saying they are likely to spend less this year than last year, according to the CNBC National Economic Survey. This is the most conservative holiday since 2013.
The survey found that average spending on gifts this year fell 11 percent to $907 from $1,004 last year when they received a large amount of cash from the government’s poverty package. This year, while wage expectations are rising and Americans feel secure about their jobs, high inflation and worries about the economy and housing prices appear to be dampening Christmas spending enthusiasm.
A third of respondents said they would spend less because of inflation. Thirty percent also said they would use a credit card or other form of debt to buy gifts, an increase of 8 percentage points from last year. Nearly 40% cited the poor economy as a reason for spending less.
“This economic malaise has gotten worse every quarter for the past year and a half, and it’s really strong now,” said Jay Campbell, a partner at Hart Research, a Democratic pollster that ran the survey. It reflects people’s attitudes about why they are not going to spend as much money this year.”
The survey was conducted among 801 people across the United States between November 26 and 30. It has a margin of error of plus or minus 3.5%.
While savings from bailout checks have dwindled and inflation has sapped consumer confidence and strength, this may be offset by a rise in U.S. employment of 4.3 million heading into the holiday shopping season and a lower unemployment rate than in December 2021. Some pessimistic willingness to spend.
In fact, only 6% were very concerned about their job security, while another 11% said they were somewhat concerned. Meanwhile, 39% expect their wages to increase by 4.6% in the next year, a pretty strong increase.
Regardless of their personal financial situation, many people believe the U.S. economy is in bad shape, the survey found. 14% of respondents said the economy is good or excellent, the lowest since 2013; 44% think the economy will worsen in the next 12 months, the fourth highest figure in the 15 years of the survey; 65% think it is in or is about to fall into recession; 38% Their home prices are expected to rise over the next year.
All told, 63 percent of Americans are pessimistic about the current state of the economy and its future prospects.
As for favorite places to shop, the survey showed online spending was the largest percentage during the pandemic, when many shoppers avoided brick-and-mortar stores. More than half of respondents chose online shopping as their first choice for holiday shopping, followed by 21% who preferred big box stores like Walmart (WMT-US) or Best Buy (BBY-US). Local stores were the top choice for 16% of respondents.
While many see online shopping as a way to save money, wealthier Americans prefer it compared to those with lower incomes. About two-thirds of Americans with incomes over $100,000 choose online shopping as their preferred method of holiday shopping, compared with 31 percent of those with incomes under $30,000. Meanwhile, 29 percent of low-income earners listed big box stores as their top destination, compared with 13 percent of wealthier respondents.
Department stores have yet to fully recover from the pandemic, with only 7% viewing them as their first choice, down 1 percentage point from last year and half the level in 2019.
