Americans Cut Back on Spending With Inflation Hitting Holidays


DECEMBER 12, 2022

Shoppers look at festive decorations and toys at a stall in the Christmas market in Munich, Germany, on Friday, Dec. 9, 2022. Despite slowing, inflation in the 19-nation euro area remains five times the 2% goal.

The gift that no one wants but everyone is getting this year? Inflation. 

Higher prices are hitting shoppers hard as 2022 comes to a close. That’s taking the joy out of gift-giving for a majority of Americans, according to a new survey from the Harris Poll commissioned by Bloomberg News.

Shoppers walk past Saks Fifth Avenue in New York, U.S., on Monday, Dec. 27, 2021. U.S. holiday sales jumped 8.5% from last year as consumers spent more money on clothes, jewelry and electronics, a report from Mastercard SpendingPulse showed.

Inflation surged to a 40-year high this year, while wages struggled to keep up. Americans are cutting back on their holiday spending as a result. About 60% of respondents said they plan to buy fewer gifts and to purchase gifts for fewer people. A similar percentage are cutting back on holiday travel.

Meanwhile, more than one-third have decided to skip gift-giving altogether due to the costs.

That’s leading Americans to lower their expectations on what they’ll unwrap. Three in 10 say they expect to be disappointed by the gifts they receive this year, with millennials and Gen Z especially pessimistic.

Among those still planning to buy presents, 70% are using debit cards or cash to fund their purchases, while 60% are using credit cards, 29% are dipping into their savings accounts and 22% are turning to buy now, pay later services.

Courtesy/Source: Bloomberg Businessweek