Consumers Increase Holiday Spending Intentions

The total amount Americans estimate they’ll spend on Christmas or other holiday gifts this year averages $975 in Gallup’s final 2023 reading, taken in November. This exceeds consumers’ holiday spending estimate from a year ago by more than $100 and is the highest in Gallup’s November measures historically since 1999.

According to Gallup, Americans’ November forecast for their holiday gift spending has more than recovered from the $616 low recorded during the 2008 financial crisis when it had tumbled by $250 from the year prior. Since then, it has generally trended upward, although it was fairly steady near $850 for the past four years before surging well past that this year.

The latest figure, based on a poll conducted Nov. 1-23, is also higher than Americans’ average $923 spending prediction in October. This is only the fifth time in the 18 years since 2006 that Gallup has asked the holiday spending question in both October and November that the average amount has increased between the two months. More typically, consumers’ spending estimate declines as the season progresses.

Both the recent and year-over-year increases seen in consumers’ November holiday spending estimate run contrary to the implications of Americans’ continued pessimism about the economy and relatively sluggish overall spending in October, according to recent Commerce Department data.

However, the increase could reflect consumer interest in retailer promotions that kicked off ahead of Black Friday -- a day that, by some accounts, showed strong year-over-year growth in sales. Additionally, a recent analysis by the San Francisco Federal Reserve found consumers holding significant, albeit dwindling, “excess savings” -- meaning they have money to spend should they want to, or they likely feel somewhat confident about spending it.

Holiday Budget Increases Most Among Young and Middle-Income Shoppers

The large increase since last year in holiday shoppers’ November estimate of what they’ll spend is mainly explained by Americans in middle-income households. This group -- those with an annual household income between $40,000 and $99,999 -- plans to spend $947 this year, on average, up more than $200 from last year’s $709. By contrast, there has been minimal change in upper-income Americans’ already high estimate of over $1,400 and a slight decline in lower-income Americans’ estimate, slipping from $477 to $429.

Expected spending has also increased more among women (up by $137) than men (up $43) and far more among adults under age 35 (up $253) than middle-aged (up $73) and older adults (up $62). Still, middle-aged adults’ holiday spending remains the highest of all age groups, at $1,111, partly explained by the higher proportion of adults in this category who have children under 18. Overall, households with children plan to spend $1,306, compared with $835 among those in households without children.