Story Highlights
- Americans plan to spend an average $923 on gifts this season
- Gift budget is down slightly from last year but still above pandemic-era lows
- Nearly as many say they will spend more as plan to spend less than last year
WASHINGTON, D.C. -- Gallup’s preliminary reading on the 2023 holiday retail season finds Americans predicting they will spend an average $923 on Christmas or other holiday gifts, just shy of the $932 they estimated at the same time a year ago. The public’s holiday spending intentions were similar to today's in 2019 before sinking closer to $800 in the first two years of the pandemic, in 2020 and 2021.
Although consumers’ current spending intentions are on the high side for Gallup’s October readings, conducted about annually since 2006, the lack of an increase over last year points to potentially moderate rather than robust sales. This is because in years when people’s holiday spending estimate is similar to the previous year’s, actual holiday retail sales (the average of November and December retail sales, not including autos and gas) have usually increased by between 3% and 5%, close to the long-term average of 3.9%.
The importance of holiday spending to the economy is underscored by the large proportion of Americans intending to take part in gift-giving traditions. Nearly nine in 10 adults say they will spend something on Christmas or other holiday gifts this year, even if only a minimal amount. However, the majority plan to spend at least $500, including 35% who say they will spend $1,000 or more.
The latest findings are from an Oct. 2-23 poll conducted as consumers continue to deal with moderate inflation, rising interest rates and reduced personal savings, at the same time that unemployment remains low and wages are improved. The survey was completed before the latest Commerce Department report on the U.S. economy showed that the nation’s gross domestic product surged in the third quarter, growing by 4.9%, up from 2.1% in the second quarter.
A Slim Gap Between Those Planning to Spend Less vs. More
The new poll also shows little change from last year in Americans’ characterization of whether they will spend more, less or “about the same” money on gifts as they did the year prior. Following the normal pattern, the largest share of consumers, 58%, say they will spend about the same, with a higher percentage saying they will spend less (23%) rather than more (18%).
Still, because the “more” percentage is on the high side for this trend, the gap -- just five percentage points -- between “less” and “more” is narrower than usual.
While not necessarily a sign of a sales boon, it provides some additional reassurance that consumers won’t sharply curb their holiday spending this year.
Bottom Line
Americans’ gift-buying intentions in October point to less robust holiday sales this year than last, when average holiday retail sales grew by 6.2%, or than in 2021, when holiday spending surged by an unexpected 13.4%. But Gallup modeling indicates sales are currently poised to grow by between 3.7% and 4.5%, which would be historically respectable, given that there have been several recent years of growth below 3%.
The science of retail spending predictions is far from perfect, partly because consumer spending can bend to economic or other shocks during the autumn months. This was evident in consumers’ clamping down on their spending mid-holiday season in 2008 during the unfolding global economic crisis. On the other hand, the sharp rise in spending in 2021 may have sprung from rising concerns about supply-chain obstacles, causing consumers to respond to aggressive retail advertising to buy early and often.
Gallup’s forthcoming November update on Americans’ estimated holiday spending will offer insight into whether consumers’ current shopping mindset is holding steady as the season progresses or shifting in response to events yet to unfold. Perhaps because of such midseason changes, the November spending forecast (based on analysis of trends since 1999) has been slightly more accurate than the October reading.
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