The Impact of Inflation on Holiday Consumer Spending

Consumers in the US are taking a cautious approach to their holiday spending as they grapple with high prices, dwindling savings, and rising debt. While shoppers are still spending, they are focusing more on essentials and making fewer discretionary purchases. General merchandise sales have fallen, and retail sales dipped slightly last month. The wobbly consumer sentiment could raise the odds of a recession. Although some economists predict a rise in holiday sales, others note that households are facing inflationary pressures and have depleted their pandemic-related savings. Credit card debt has surged, and consumers are making more subtle tweaks to their shopping habits, which could curb holiday sales.