Inflation appears to be taking some of the holiday cheer out of Americans’ gift shopping this Christmas, according to the CNBC National Economic Survey.
The survey found that the higher cost of goods is a key factor influencing how much and where shoppers spend, suggesting that the rise in import prices due to inflation and tariffs over the past few years is being felt at the checkout.
The survey of 1,000 people nationwide found, with a margin of error of +/- 3.1 percentage points, that high prices are the No. 1 reason Americans are spending less, and for the first time, the survey found that it’s the main reason Americans are spending more.
Of those who are spending less, 46% say it’s because of high prices, an increase of 10 points from the 2024 survey. Even more surprising, 36% of people who are spending more say it’s because of high prices, an increase of 11 percentage points from last year. Over the past six years, most Americans say their spending has increased because their income has increased and the economy has been strong. They tended to cut back on spending because they had low incomes or felt the economy was weak.
CNBC National Economic Survey
“Nearly 70% of people say prices are higher now, and that’s having a much bigger impact on both those who are spending more and those who are spending less than in the past,” said Jay Campbell, partner at Democratic polling firm Hart Research, which conducted the survey.
Affordability issues are clearly weighing on consumers’ minds, with 61% saying they believe prices are rising faster than their incomes, including 74% of those with incomes between $30,000 and $50,000 and 78% of those with incomes below $30,000.
Overall, 41% of Americans plan to spend less this year, 42% say they will spend about the same amount, and 16% say they will spend more. Americans generally spend less each year, but this year’s figure was 6 percentage points higher than last year, marking the largest increase since inflation spiked in 2022.
Americans plan to spend an average of $1,016 on holiday gifts this year, about the same as last year. But among Americans who actually buy gifts, the figure is $1,199, a significant 3.9% increase compared to 2024.
Negative outlook for the economy
The survey found that 60% of people are pessimistic about the current state of the economy and pessimistic about the outlook, the highest level since December 2023. The percentage of people who are currently optimistic and optimistic about the future has fallen by 3 percentage points.
As has been the case throughout Trump’s presidency, Democrats and independents are overwhelmingly pessimistic. But economic concerns seem to bother even Republicans. Ninety-three percent of Democrats and 86% of independents rate the economy as fair or poor, as do 53% of Republicans.
“The shift from a majority of Republicans saying, ‘Yeah, everything is good or good,’ to saying it’s fair or bad is a bad sign,” said Micah Roberts, partner at Republican polling firm Public Opinion Strategies, which conducted the survey. “Expectations for next year’s economy have also deteriorated,” Republican lawmakers said.
Price concerns appear to have changed the way at least some Americans shop for the holidays. According to the survey, when Americans were asked where they shopped or planned to shop during the holiday season, the number of Americans who said online retailers increased by nine points, the number of Americans who said large stores such as Walmart or Best Buy increased by three points, and the number of Americans who said wholesale retailers increased by six points.
costco shopper
Data shows that people who spend $1,000 or more are more likely to visit: costco Meanwhile, people spending between $500 and $1,000 this year are more likely to search online. Compared to 2024, the strongest moves toward online shopping were among those with incomes below $30,000, women of all ages, and those spending the least on holiday items.
According to the survey, 28% of people only buy discounted products, and half say they look for discounted products but buy what they want anyway. 10% are not interested in bargains.
Americans enter the holiday season not only with rising prices, but also with more debt. 57% of people say they have at least some debt for the holiday season, an 11 percentage point increase from last year. The percentage of people who answered that they had a large amount of debt increased by 5 points. The age group with the biggest changes was 18-34, which may reflect changes in student loan payment status.
Full details of the study can be found here.
