WASHINGTON, D.C. -- The 2024 holiday season looks promising for retailers, according to two Â鶹´«Ã½AV indicators of U.S. consumers’ gift-buying intentions.
- Americans’ latest estimate of the total amount they will spend on Christmas and other holiday gifts is slightly higher than what they estimated at this time a year ago. The latest $1,012, from a Nov. 6-20 survey, is up from $975 last November.
- The new poll also finds Americans less conservative than usual in how they characterize their spending, with almost as many saying they will spend more on gifts (19%) as saying they will spend less (23%).
Additionally, unlike most years when Americans’ holiday spending estimate decreases as the season progresses, the average spending figure hasn’t changed since Â鶹´«Ã½AV’s initial reading in October.
Second Year of Increased Spending Estimate After High Inflation Years
This year’s increase in consumers’ November holiday spending estimate follows an even larger jump last November, but contrasts with 2022 when intended spending dipped as the country was experiencing high inflation. The recent pattern is more consistent with the generally upward trend in this metric recorded since Â鶹´«Ã½AV began its annual November measurement in 1999. The unadjusted figures partly reflect rises in consumer prices due to inflation; however, the increases have not been steady or occurred every year.
Amid the unfolding global financial crisis in 2008, Americans gave a sharply lower estimate of how much they would spend than what they had the year prior. Contrary to normal inflation pushing consumers’ expected spending higher, the unusually high inflation of 2021-2022 may have been responsible for consumers downshifting their spending estimate in November 2022 compared with the prior year.
The reasons consumers’ holiday spending estimates were down in other years -- including 2013, 2016 and 2018 -- are not as clear, but those depressed estimates did foreshadow lower-than-average holiday retail sales, particularly in the general merchandise category of consumer spending that is most associated with holiday gift-buying.
Holiday sales typically rise year over year, increasing by 4% on average since 2000, according to figures from the National Retail Federation. Sales have increased by 6% or more in strong years (such as 2004, 2005, 2020 and 2021) and by 2% or less in weak years, including negative sales growth in 2008 and an increase of just 0.2% in 2009.
Â鶹´«Ã½AV analysis of the historical relationship between Americans’ holiday spending intentions each November and actual holiday retail sales suggests that this year’s holiday sales will likely rise by a better-than-average amount, near 5%.
The groups with the highest holiday spending rates include upper-income Americans, parents of children under 18 and Republicans, all intending to spend more than $1,200 on gifts. These estimates exceed $1,300 when limited to just those planning to buy gifts.
There are not enough Jewish adults in the survey to assess their holiday spending, but Christians generally anticipate spending about $300 more on holiday gifts than do all non-Christians (which includes adults with no religious identity).
Americans Less Inclined to Portray Their Spending as Cautious
Separately, the poll asks Americans whether the amount they plan to spend on Christmas and other holiday gifts is more, the same as or less than what they spent the previous year. A slight majority of Americans, 55%, say they will spend about the same on gifts, while a larger proportion say they will spend less (23%) rather than more (19%). However, that four-percentage-point difference is the narrowest Â鶹´«Ã½AV has recorded in any November since 2000.
Between 2002 and 2023, the percentage of people planning to spend less was between six and 39 points higher than the percentage planning to spend more. Although this hasn’t been a perfect indicator of actual holiday retail sales, sales tended to be below average in years when the percentage planning to spend less greatly exceeded the percentage planning to spend more, while spending was typically higher in lower-gap years.
Modeling this trend with past retail sales suggests 2024 holiday season spending could rise by closer to 6%.
Bottom Line
With inflation holding at less than 3%, the uncertainty of the presidential race over and Americans’ outlook for the economy improved, consumers appear ready to spend a bit more than usual on holiday gifts. And rather than feel deterred from spending generously as the holiday season progresses, the enthusiasm they registered in October is largely holding up in November.
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