Title: Economic Concerns Fail to Deter Record Holiday Spending
American Consumer Spending
Amid Concerns About the Economy, Americans Are Spending More
Despite widespread concerns about the economy among Americans, consumer spending has remained remarkably robust. A study by Intuit Credit Karma revealed that 96% of Americans are worried about the current economic situation. However, despite these worries, over a quarter of them are engaging in “doom spending” – making purchases despite the economic and geopolitical concerns. This shift in shopping behavior comes as a surprise given the inflation and high interest rates, which are known to squeeze consumer budgets.
Record Holiday Shopping
The Thanksgiving holiday weekend, traditionally one of the busiest times for retailers, saw record levels of shopping. The National Retail Federation reported that an unprecedented 200 million shoppers turned out for the Black Friday and Cyber Monday sales, despite the economic headwinds. Additionally, holiday spending reached an all-time high, on track to total up to $966.6 billion, according to industry expert forecasts.
The surge in spending has raised concerns among financial experts. Credit Karma’s consumer financial advocate, Courtney Alev, remarked that people are shopping to ease their concerns about the economy, similar to the behavior termed “doom scrolling.” Yet, this trend could adversely affect their financial well-being. The Credit Karma report also mentioned that although credit card debt continues to soar past $1 trillion, Gen Z and millennials remain particularly susceptible to this kind of spending behavior.
Generation Z and Millennials
Reports indicate that 73% of Gen Zers are willing to forego expenses and live in the moment rather than save money. This is also in line with a study by Intuit, which revealed that the rising cost of living is proving to be a significant barrier to financial success for more than half of Gen Zers. Bank of America’s separate survey also found that a staggering 53% of Gen Zers view the high cost of living as a financial obstacle, adding to the pressures facing this generation.
Advice from Financial Analysts
Despite this discouraging news, financial analysts believe that younger adults have an essential tool at their disposal – time. Ted Rossman, a senior industry analyst at Bankrate, advised that while young adults may face more challenges, every dollar they save will compound. Automating a portion of one’s income and building some fun into the budget are simple methods Rossman recommended to strike a balance and avoid falling victim to higher credit card interest rates.