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Skyrocketing Prices Crush Holiday Budgets, CNBC Survey Finds

How Inflation Is Transforming Holiday Spending Habits in America for 2025

CNBC All-America Economic Survey: 41% of Americans plan to spend less this holiday season

Economic pressures Reshape Holiday Budgets Across the Nation

The ongoing surge in inflation continues to reshape how American consumers plan their holiday purchases this year. With prices climbing steadily, many shoppers are reevaluating both their spending limits and preferred shopping venues, leading to more cautious financial decisions during the festive period.

A recent survey of 1,000 adults nationwide (±3.1% margin of error) reveals that rising costs have become the primary factor driving reduced holiday expenditures.Interestingly, a segment of shoppers is responding by increasing their budgets-an unusual shift compared to previous years when income changes were the main influence on spending behavior.

Complex Shifts in Consumer Spending Patterns Amid Inflation

  • Among those scaling back purchases, 46% directly blame higher product prices-a jump of 10 percentage points from last year’s data.
  • 36% who intend to spend more cite inflation as a key motivator, marking an increase of 11 points since the prior survey cycle.
  • this dual trend contrasts with patterns observed over the past six years when rising incomes and positive economic outlooks primarily fueled increased holiday spending.

the Growing Gap between Income Growth and Price Increases

A significant majority-nearly seven out of ten respondents-agree that escalating prices are heavily influencing consumer choices across all income brackets. Notably, 61% feel wage growth is lagging behind inflation rates. This concern is especially pronounced among lower-income households: approximately 74% earning $30,000-$50,000 annually and nearly 78% making under $30,000 express worries about stagnant earnings amid rising costs.

The Outlook for Holiday expenditures in 2025

This season sees roughly 41% of Americans planning to cut back on holiday spending-a six-point rise from last year and one of the largest increases since inflation accelerated in early 2022. Simultaneously occurring,42%-plan budgets similar to previous years while only -anticipate boosting their expenses.

The average intended gift budget remains steady at about $1,016. However,-among active gift buyers,- -average per-person spending edges up nearly four percent compared with last year’s figure (< strong>$1,199). This suggests selective shoppers might potentially be allocating slightly more per item despite overall caution across broader groups.

Broad Economic Uncertainty Spans Political Divides

Pessimism regarding current economic conditions and future prospects has reached its highest level since late 2023-with six out of ten adults expressing negative sentiments toward the economy. Optimism has declined marginally by three percentage points across all demographic segments surveyed.

this widespread unease crosses political affiliations:

  • < strong >Democrats:< / strong > An overwhelming majority (93%) rate economic conditions as fair or poor.< / li >
  • < strong >Independents:< / strong > Similarly pessimistic at an 86% rate.< / li >
  • < strong >Republicans:< / strong > More than half (53%) now view economic health as fair or poor-a notable shift from prior years when most Republicans held positive views.< / li >

    “The drop in Republican confidence highlights growing concerns,” analysts observe. “Expectations for economic performance over the next twelve months are also declining within this group.”

    Evolving Shopping Preferences Under Financial Strain

    The pandemic-era acceleration toward digital commerce continues as price pressures push consumers toward new retail channels:

    • An increase by nine percentage points shows more shoppers favoring online retailers seeking convenience or better deals;
    • A modest rise (+3 points) occurs at major retail chains such as Walmart and Best Buy;
    • A six-point gain appears among customers visiting wholesale clubs like Costco or Sam’s Club;

      Diverse Shopper Segments Reveal Distinct channel Choices Based on Budget Size

      The data indicates that individuals planning holiday expenses above $1,000 tend to gravitate toward warehouse stores like Costco for bulk purchasing benefits.
      Those budgeting between $500-$1,000 show a stronger preference for online marketplaces-especially noticeable among women across various age groups and households earning below $30,000 annually.
      This pattern underscores how affordability concerns shape shopping channel preferences differently depending on income levels and gender demographics.

      Bargain Hunting Intensifies During Festive season

      • < strong >28 %< / strong > exclusively seek discounted items;< / li >
      • Half actively look for deals but remain willing to pay full price if necessary;< / li >
      • < strong >Only around 10 %< / strong > disregard discounts altogether .< / li >

        Younger Consumers Face Increasing Debt Challenges Entering Holidays

        An expanding share-now at least/ -report carrying some form of debt into seasonal shopping periods , marking an eleven-point jump compared with last year . The proportion describing themselves as heavily indebted rose five points , particularly affecting younger adults aged eighteen through thirty-four . This trend likely reflects ongoing struggles related to student loan repayments , credit card balances , and other financial pressures amid rising living costs .


        Key Takeaways: Navigating Holiday Spending Amid Inflationary Headwinds


        • Inflation remains a powerful force shaping consumer choices; many Americans either reduce spending or adjust where they shop;

          Economic pessimism transcends political lines reflecting broad uncertainty heading into year’s end;

          the popularity of online platforms , wholesale clubs ,and discount hunting strategies continues growing ;
           
           

           
           
           
           

            

             

              

              

              

             

            

            

            

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