Americans are heading into the holiday shopping season spending more on essentials like food and gas, as well as big-ticket items like cars and discretionary stalwarts such as restaurant meals.
Figures from the Commerce Department released Wednesday (Nov. 16) show October retail sales increased 1.3% from September, after posting less than half-percent moves for the prior three months. This marks the biggest monthly advance since February’s 1.7% gain. Retail sales were up 8.3% versus a year ago, a figure that is largely due to the comparable increase in inflation.
The report comes days after the October Consumer Price Index dropped to a nine-month low of 7.7% in October, as the impact of rising interest rates and weaker consumer demand saw the key benchmark post its fourth consecutive decline.
However, those numbers also showed that several crucial categories continue to eat away at household budgets and confidence, with food prices up 10.9% from a year ago.
Fuel and energy prices continued to show some of the largest increases: electricity costs rose 14% year-over-year, motor fuels 18%, and heating and fuel oil 68% since last October.
Meanwhile, a report Tuesday by the Federal Reserve Bank of New York shows that households are increasingly turning to credit cards, with American credit card balances increasing 15% during the July-September quarter compared to a year ago, the largest year-over-year increase 20 years.
Even with consumer spending up, recent research by PYMNTS shows that most American consumers have lowered their expectations for the 2022 holiday shopping season. With Christmas 39 days away, 60% of U.S. consumers are living, up 4 percentage points from October of 2021
Middle-income consumers saw the sharpest rise in paycheck-to-paycheck status, jumping 7 percentage points over the past year to 65%.
Our research also discovered that 15 million — or 5.8% of — U.S. consumers who shopped for holiday gifts in 2021 don’t plan to do the same this year, with just 79% of consumers overall plan to shop for the 2022 holiday season, a 10% decrease from 88% in 2021.
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