Story Highlights
- Consumers estimate they will spend an average $932 on gifts
- Estimate up nearly $100 from last October
- Americans still reluctant to say they will spend "more" than a year ago
WASHINGTON, D.C. -- The amount Americans intend to spend on Christmas gifts this year is the highest Gallup has recorded in three years, since before the pandemic.
U.S. adults polled Oct. 3-20 estimate they will spend an average $932 on gifts this season. This is sharply higher than Americans' average $837 holiday spending prediction last October and their $805 forecast in October 2020. Today's estimate nearly matches the $942 measured in October 2019 -- the high point in Gallup's trend since 2006.
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One reason Americans' holiday spending estimate is especially high this year could be that consumers are expecting to pay more for goods like clothing, electronics and toys after a year of high inflation. Still, the fact that spending intentions are significantly higher now than a year ago at this time is a promising sign for retailers as the holiday season gets underway.
The average amount Americans anticipate spending encompasses a range of shopping budgets. More than a third of U.S. adults, 37%, plan to spend $1,000 or more. Thirty percent plan to spend between $250 and $999, while 17% plan to spend less than $250.
This year's higher overall spending estimate is mainly the result of more Americans saying they will spend $1,000 or more, which is up from 33% last year, as well as fewer saying they will not spend anything.
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Consumers Reluctant to Say Their Spending Will Increase
The new poll also asked Americans to say whether the amount they plan to spend on gifts will be more, less or about the same as what they spent last year. Gallup's October trend on this question since 1996 finds Americans routinely saying they will spend about the same as they did the previous year, while relatively few ever say they will spend more. But the ratio of those saying they will spend more versus less can be telling.
Despite Americans' relatively high spending estimate for this holiday season, the poll finds consumers remaining fairly cautious in characterizing how their Christmas spending will compare to last year. Just 17% say they will spend more on gifts than they spent a year ago, while 26% say they will spend less and 55% say they will spend the same amount.
Today's figures are similar to the results in October 2020 and 2021, but are more conservative than the sentiments expressed from 2017 to 2019, when about as many adults said they would spend more as spend less.
The height of public caution on this measure in Gallup's October trends was recorded in 2008 amid the global economic crisis. That foreshadowed the worst holiday season in modern history, with spending falling nearly 5%.
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Spending Intentions Look Promising, but No Guarantees
Gallup's annual October readings of the amount Americans plan to spend on gifts cannot be used to forecast precisely how much holiday retail sales will change year to year, but they are usually indicative of the direction of change.
- Declines in Americans' estimated spending in 2008 and 2018 corresponded with weaker sales those years than the year prior.
- Stable or increased spending estimates in 2009, 2010, 2014, 2019 and 2021 corresponded with stronger sales those years than the year prior.
- In other years (2011, 2015, 2016 and 2020), year-over-year changes in the October estimate gave an incorrect signal of which way spending would ultimately go; although, in 2020, Gallup's November update of spending intentions captured a substantial increase that better aligned with the robust sales recorded that year.
In October 2021, consumers' spending estimate was a fairly modest $837. But mounting fears about supply chain delays and rising inflation reportedly compelled many holiday shoppers to shop earlier and with more attention to sales, boosting overall outlays. Between that and consumers' solid financial means amid low unemployment and high personal savings, November-December retail sales rose an unusually high 14.1% in 2021. That increase, as reported by the National Retail Federation, compares with the average 4% year-over-year increase seen in the NRF estimates since 2006.
Consumers' holiday spending can also be influenced over the course of the season by changes in the economy, gas prices or even major news events that affect people's outlook on the economy. For now, Americans' 2022 spending intentions suggest retailers will enjoy a better-than-average holiday season, although not rising to the level of the extraordinary one they had last year.
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Now, diving into the information provided in the article:
1. Holiday Spending Trends:
- According to a recent Gallup poll conducted from October 3-20, U.S. adults estimate that they will spend an average of $932 on Christmas gifts this year.
- This spending projection is the highest recorded by Gallup in three years, surpassing the estimates from the last two Octobers ($837 in 2021 and $805 in 2020).
- The current estimate is nearly on par with the peak spending recorded in October 2019 at $942, marking a notable upward trend in holiday spending intentions.
2. Factors Influencing High Spending Estimates:
- The article suggests that one reason for the unusually high holiday spending estimate is the expectation of increased prices for goods such as clothing, electronics, and toys, following a year of elevated inflation.
- Despite concerns about rising prices, the fact that spending intentions are significantly higher than the previous year is seen as a positive sign for retailers as the holiday season kicks off.
3. Distribution of Spending Budgets:
- The average spending estimate of $932 encompasses a range of shopping budgets among U.S. adults.
- Notably, 37% of respondents plan to spend $1,000 or more, indicating a substantial portion of the population with higher spending intentions.
- Thirty percent plan to spend between $250 and $999, while 17% plan to spend less than $250.
4. Comparison with Previous Years:
- The higher overall spending estimate for this year is attributed to more Americans indicating they will spend $1,000 or more, a notable increase from the previous year.
- Interestingly, fewer respondents are stating that they will not spend anything, contributing to the overall rise in spending intentions.
5. Consumer Caution in Characterizing Spending:
- Despite the high spending estimates, the poll reveals that consumers remain cautious in characterizing their Christmas spending compared to the previous year.
- Only 17% of respondents say they will spend more on gifts than they did a year ago, while 26% say they will spend less, and the majority (55%) expect to spend the same amount.
6. Historical Trends and Economic Impact:
- The article discusses historical trends, noting that the ratio of those saying they will spend more versus less can be indicative of economic conditions.
- The height of caution was recorded in 2008 during the global economic crisis, which foreshadowed a significant decline in holiday spending.
- While Gallup's October readings cannot precisely forecast holiday retail sales, they often provide an indication of the direction of change.
7. Influence of External Factors on Spending:
- Consumer holiday spending can be influenced by various external factors such as changes in the economy, gas prices, or major news events.
- The article acknowledges that current spending intentions suggest a better-than-average holiday season for retailers, but external factors could still impact the final outcome.
In conclusion, the article provides a comprehensive overview of current holiday spending trends, factors influencing consumer behavior, historical context, and the potential impact of external factors on the final outcome of holiday retail sales.
