Americans Ready to Open their Wallets this Holiday Season

US Consumers Plan to Spend More than Last Year, but Inflation Reduces How Far Their Dollars Can Go

NEW YORK, Nov. 12, 2024 /PRNewswire/ -- According to The Conference Board Holiday Spending Survey, the average US consumer intends to spend $1,063 in nominal terms on holiday-related purchases in 2024, up 7.9% from $985 in 2023. This is also higher than in 2022 ($1,006) and 2021 ($1,022). On gifts, consumers plan to spend an average of $677, up 3.4% from $654 last year. After slumping last year, consumers' budgets for non-gift items such as food, decorations, and wrapping paper are also up 17% at $387. However, after adjusting for inflation, these figures are less robust and suggest limitations on how many items consumers can actually afford this year. Total spending plans in 2017 dollars are $860 in 2024, up only 5.3% from 2023 and below the 2022 and 2021 levels.

"As reflected in October's strong rebound in the Consumer Confidence Index^®, US consumers are cheerful heading into the holiday season," said Dana M. Peterson, Chief Economist at The Conference Board. "The Holiday Spending Survey shows Americans are relatively upbeat about gift-giving and celebrating this year. However, several years of high inflation have raised price levels, reducing purchasing power. Once accounting for inflation, planned holiday spending remains below pre-pandemic levels. Indeed, most consumers expect gifts and food prices to be higher this year than last year. Perhaps as a result, the majority will continue to celebrate the holidays at home or near home this year, with only 31% of consumers planning to travel."

Peterson added: "Most consumers (52%) are planning to spend the same amount on gifts in 2024 as in 2023. Only 23% of consumers are planning to spend more than last year and 25% are planning to spend less. While younger and wealthier consumers are eager to spend more this holiday season, older consumers (over 65) and those earning under $75K expect to reduce both gift and non-gift expenses compared to last year."

The survey found that buying gifts online has become extremely common, with only 8% of consumers planning to do all their shopping in stores. However, the share of consumers planning to do most of their 2024 gift-shopping online declined slightly compared to 2023. Overall, consumers continue to favor purchasing vacation and travel, gift cards, and toys and games as gifts, while books/music/DVDs, beauty products, and home decor are less popular.

Food and gifts are expected to be more expensive in 2024:

• About 1 in 2 consumers expect to pay more for gifts and food this year than last year
• However, the share of consumers anticipating higher costs is lower in 2024 than in 2023

Younger consumers plan to spend more on gifts this year, while older consumers are cutting back:

• As in previous years, consumers under 45 are planning to spend the most on gifts. 
• Compared to last year, consumers under 55 expect to spend more on gifts this year while consumers over 55 plan to spend less.
• All age groups plan to spend more on non-gift items in 2024 compared to last year, with the largest increase for those aged 55 to 64.

Wealthier consumers plan to spend more this year, while lower income consumers are cutting back:

• The largest spending increase comes from consumers earning between $75K and 100K and those earning over $125K.
• Consumers earning less than $75K are planning to cut spending on both gifts and non-gift items this year. 

Consumers report that they expect to do a bit less shopping for gifts online:

• 43% of consumers expect to purchase at least half of their gifts online in 2024, less than in 2023 and close to the pre-pandemic level.
• Only 8% expect to buy none of their gifts online, matching last year's share, and less than half the pre-pandemic level of 17% in 2019.

Purchasing plans reveal a preference for travel and gift cards:

• Compared to last year, consumers plan to purchase more vacation and travel as gifts in 2024, as well as more gift cards and more toys and games.
• Consumers are less likely to give books/music/DVDs, beauty products, and home decor.

Consumers plan to stay home or near home for the holidays:

• 69% of consumers do not intend to travel for the holidays.
• Almost half of those traveling plan to drive to their holiday destinations.

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org.

SOURCE The Conference Board