Nearly 12% of Americans aren’t buying gifts this year, an almost 7-point increase since 2020, but high-income households will spend five times that of lower-income households this holiday season, according to a survey released Thursday by Deloitte, reports CNBC.
The annual rate of inflation in the U.S. hit 6.2% in October 2021, the highest in more than three decades, as measured by the Consumer Price Index (CPI), a likely factor for the spike.
The jump represents a significant increase from the 3.7% annual rise in September.
Another stark fact: According to CNBC, consumer confidence hit a 10-year low in November, as measured by the University of Michigan Consumer Sentiment Index. This, as inflation climbed to levels not seen in many years. A consequence: Yes, there's spending, but shoppers are more nervous about opening their wallets and purses..
Unsurprisingly, wealthier families will likely dish out more.
The Deloitte survey found that households with $100k-plus income will spend $2,624 each this holiday, up 15% from 2020, compared with $536 for households with incomes less than $50,000, a 22% decline from year-ago levels.
So while trade groups have projected robust holiday sales this year, that seems mostly driven by the spending of more affluent shoppers.
"There are consumers that are looking to spend a lot. And if I spend $5,000 on a trip to Disney and then a few thousand dollars on fancy and expensive gifts for my family or buy a new car ... that’s going to outweigh a host of people who aren’t spending the $700 they might normally spend," Karthik Easwar, an associate professor at Georgetown University’s McDonough School of Business who specializes in consumer psychology, told CNBC.
Stephen Rogers, executive director of Deloitte’s consumer industry division, suggested the stark gap in holiday purchases from last year to this year "is a pretty good reflection of the tale of two pandemics, right?
"What starts off as a health crisis turns into a financial crisis if you’re in the lower-income [bracket]. Those of us who have investments in 401ks did quite well," he said. "You can see from 2019 to 2021, the lower income group is spending almost half of what they used to spend. And the higher income group is almost double what they used to spend two years ago."
Deloitte polled 4,315 consumers about their holiday shopping plans between Sept. 7 and Sept. 14.
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