{"id":158025,"date":"2025-11-28T13:19:18","date_gmt":"2025-11-28T13:19:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/158025\/"},"modified":"2025-11-28T13:19:18","modified_gmt":"2025-11-28T13:19:18","slug":"why-consumers-are-feeling-spending-strain-as-holiday-gifting-begins","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/158025\/","title":{"rendered":"Why Consumers Are Feeling Spending Strain As Holiday Gifting Begins"},"content":{"rendered":"

Santa won’t be the only one tightening his belt this year \u2014 the American consumer<\/a> is already feeling the pinch, and many haven’t even finished digesting their Thanksgiving stuffing. As we head into Black Friday weekend, the forecast for holiday shoppers may be chilly: prices on consumer goods are rising faster than is comfortable for many gift-givers, according to two recent reports<\/a> by Bank of America.<\/p>\n

Sixty-two percent of the more than 2,000 respondents to Bank of America’s holiday survey, conducted in late summer, said they expected financial strain<\/a> tied to holiday expenses, and 58% say gifts feel more expensive.<\/p>\n

More than half of the respondents pointed to tariffs as a suspected cause. The firm found that tariffs <\/a>announced this spring likely contributed to price increases in categories such as electronics and jewelry, goods often purchased as holiday gifts.<\/p>\n

Holiday spending per household is up about 6% according to the bank’s card data, yet retail transaction volumes have declined slightly over the course of the year. The takeaway: shoppers are shelling out more, only to walk away with less.<\/p>\n

BofA’s reports also point to a widening chasm in how those along different income brackets are likely to experience the season’s bounty<\/a>.<\/p>\n

Higher-income households continue to show spending and wage growth that outpace everyone else. Many white-collar professionals<\/a>, such as Wall Street investment bankers, are expected to have surging bonus years, according to forecasts, which is likely to hand six-figure year-end incentive pay for higher-income earners.<\/p>\n

Buyer’s remorse<\/p>\n

For everyone else, the most wonderful time of the year is already fomenting stress at the checkout counter.<\/p>\n

Electronics spending per transaction jumped nearly 8% in a single month after the spring tariffs, and jewelry spending rose about four percentage points after an August tariff announcement, the bank found. Add in record-high gold prices<\/a> this year \u2014 which have made gold-based pieces costlier \u2014 and suddenly, holiday gift-giving has relinquished some of its luster.<\/p>\n

With rising prices leaving some shoppers with fewer items to buy, survey respondents say they’re getting more selective about who will end up on their “naughty” or “nice” lists.<\/p>\n

Thirty-eight percent say they’ll only buy gifts<\/a> for immediate family and close friends, while 23% have agreed with relatives to scale back their gift-giving.<\/p>\n

Among those feeling financial strain, 87% plan to shop at discount stores to counter rising prices, and 51% say they’d consider gifting a “dupe,” a cheaper imitation<\/a> of a luxury item. More than half said they planned to kick off their shopping sprees earlier than usual to spread out expenses, the survey found.<\/p>\n

Card data showed that spending by high earners increased roughly 3% over the past year, compared with less than 1% for lower-income households. The firm said wage growth followed a similar split \u2014 after-tax pay rose about 4% for higher earners, but only about 1% for those at the bottom. Goldman Sachs, meanwhile, is warning that the labor market is softening<\/a> across tech, manufacturing, and other sectors, which could squeeze those already on the edge.<\/p>\n

That means, with prices climbing and paychecks under pressure, holiday shoppers may be left wondering who’s actually going to come down the chimney this year: Santa Claus with a sack of toys, or the Grinch, offering only an inflationary pinch.<\/p>\n","protected":false},"excerpt":{"rendered":"Santa won’t be the only one tightening his belt this year \u2014 the American consumer is already feeling…\n","protected":false},"author":2,"featured_media":158026,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[5921,12587,1643,138,104435,219,1138,104433,104432,68172,27892,35844,111,139,69,3333,104434,35836,583,379],"class_list":["post-158025","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-electronic","tag-america","tag-bank","tag-business","tag-consumer-good","tag-economy","tag-firm","tag-gift-price","tag-holiday-shopper","tag-holiday-spending","tag-household","tag-jewelry","tag-new-zealand","tag-newzealand","tag-nz","tag-price","tag-respondent","tag-strain","tag-tariff","tag-year"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/158025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=158025"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/158025\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/158026"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=158025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=158025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=158025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}