Holiday Spending Forecast: Upper-Income Shoppers Splurge While Lower-Income Feel Squeeze

Consumer spending remains strong, helping to power economic growth, despite high inflation and interest rates. Retail sales are expected to grow 5% this holiday season.

Surveys show many consumers still plan to spend generously this holiday season, with spending forecasts above pre-pandemic levels.

However, other surveys indicate some consumers are cutting back, particularly on decorative lights and fancy holiday meals to save money.

Lower-income consumers are facing more financial strain from high interest rates on loans and credit card debt.

Holiday spending is likely to be bifurcated, with upper-income consumers spending freely while lower-income shoppers will be more cautious.