Overall, almost every economist is predicting holiday spending will be up from last year’s levels, rising anywhere from 2.5% to 8%, according to a series of forecasts from varying sources examined by UPI. Those numbers have put retailers in a generally festive mood as a long-term trend of higher holiday spending in each successive year continues.

The forecasts are coming amid solid economic growth so far this fall. U.S. real gross domestic product, or GDP, rose at an annual rate of 2.8% in the third quarter, after a 3% rise in the previous three months. The GDP bump was attributed mainly to increases in consumer spending.

But, much as they indicated to pollsters after this month’s elections, many Americans don’t feel the positive effects of the improved macroeconomic picture engineered by President Joe Biden‘s administration and still are being pinched by stubbornly high prices for everyday essentials such as food and housing.

For instance, food price inflation, while coming down from historic highs since the COVID-19 pandemic, has nonetheless remained sticky this year. The Department of Agriculture last month predicted food prices will finish the year 2.3% higher, while 2025 will likely bring another 2.4% increase.

This situation has produced a “tale of two holidays,” according to surveys — one in which those making enough to not be concerned about rising food and housing prices are planning sizable splurges while those who do are either cutting back or seeking bargains for their holiday gifts.

What follows is a recap of some of the major holiday spending surveys.

PwC: Holiday spending is bifurcated

The international accounting and financial services firm PricewaterhouseCoopers predicts consumer spending this holiday season will jump by 7%, with the average shopper spending $1,638 on gifts, travel and entertainment.

While at first blush that may sound like great news for retailers, a closer look reveals a disconnect. The overall increase is being spurred by a subset of consumers making more than $65,000 annually, who indicated they are ready to shell out an average of $3,000 — a notable 33% increase in their spending from 2023.

Meanwhile, nearly three in 10 consumers (29%) said they plan to spend less compared to the 2023 season; that cohort is 10% larger than last year. These consumers say they’ll spend just $776 this season.

“Notably, over one-third (34%) of consumers earning more than $65K per year say they will spend more, while just one-fifth (21%) of those earning under $65K say the same, suggesting that the bifurcation in spending patterns is correlated (though not entirely) with the bifurcation in income,” PwC said.

Generational differences are also in sharp focus this year, with younger Gen Z and Millennial shoppers preferring to buy “experiences,” such as travel, concerts, shows or outdoor activities over physical goods, while Gen X and Baby Boomers prefer gift cards and shopping in physical stores.

“As retailers and consumers adapt to these shifting dynamics, the 2024 holiday season looks to be one of strategic spending, personalized experiences and technological integration,” the firm said.

National Retail Federation: Record spending on tap

The National Retail Federation has forecast holiday spending will grow between 2.5% and 3.5% over last year, equating to between $979.5 billion and $989 billion in total spending during November and December.

“The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year,” NRF President and CEO Matthew Shay said. “The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth.”

Inflation isn’t even mentioned in the federation’s analysis, but references to budget-conscious consumers are sprinkled in. For example, their concerns show up in survey results about when holiday shopping is planned.

Specifically, more consumers said they will shop in November during the five-day window between Thanksgiving Day and Cyber Monday. A record 183.4 million people are planning to shop in-store and online during that weekend, up from the previous record of 182 million in 2023.

More than half of consumers surveyed told the retail organization their chief motivation for shopping during Thanksgiving weekend is that “the deals are too good to pass up,” indicating they are keen to hunt for bargains.

Younger shoppers who traditionally have less to spend will especially be out early to take advantage of Thanksgiving weekend deals this year, the trade group found, predicting that a whopping 89% of young adults between 18 to 24 are planning to shop then.

Further evidence of cost-consciousness among consumers pinched by inflation is that among those who said they are not planning on shopping early, half indicated they could be enticed to do so if items they want are on sale or they are offered free shipping.

Mastercard: Return to pre-pandemic ‘norm’

Credit card issuer Mastercard predicted holiday spending will be up 3.2% year-over-year in what it calls a “return to pre-pandemic norm” in terms of declining prices for popular gift items, such as electronics and appliances, apparel, sporting goods, personal care products and jewelry.

That means the “price may be right” for many consumers after three consecutive years in which costs either rose sharply or at least did not decline.

“This is a return to the pre-pandemic norm when these goods consistently experienced outright declines in prices,” the company said in its analysis.

“The outsized inflation for the holiday shopping basket in 2021 and 2022 — driven by bottlenecks in global manufacturing and transportation — was the exception. The renewed moderation in prices should incentivize consumers to purchase more goods.”

However, as in other surveys, Mastercard found this holiday shopping season will be a “tale of cohorts,” meaning big differences among various groups.

For instance, those who hold financial and real estate assets have seen their wealth and spending power increase dramatically since 2019 — the value of financial holdings have increased by 31% and real estate holdings are up 49% since the pre-pandemic period, so these consumers will be in position to spend big this holiday season.

But for households struggling with debt, including recent homebuyers who financed with high mortgage interest rates and consumers who face costly student debt loan repayments, the holiday spending picture isn’t as rosy.

Exacerbating the effects of lingering inflation for essential items, workers in lower-paid job sectors are seeing their pandemic-era wage growth slowing down — a sharp reversal from earlier in the recovery when they experienced the fastest and most meaningful wage growth, the Mastercard analysts noted.

Deloitte: Have a frugal holiday!

The accounting firm Deloitte say it expects the average consumer to spend 8% more this year, pushing the per-person outlay to $1,778, which should make retailers’ holiday season “cheery and bright,” the firm said in its analysis.

As in the PwC survey, Deloitte found one of the chief reasons for the uptick (along with higher prices and a generally rosier U.S. economic outlook) are big spending plans from wealthier consumers.

Those who make between $100,000 and $199,000 said in a survey they plan to ramp up their holiday spending by 17%, going from $2,167 per person in 2023 to more than $2,500 this year.

Meanwhile, those who make less than $50,000 annually said they would increase their spending by 12%, from $742 to $829. Only 37% of such consumers told Deloitte they expected the economy to improve in 2025, perhaps explaining why President-elect Donald Trump’s attacks on the Biden-Harris administration’s economic performance resonated with lower-income voters.

But all income groups, even the wealthier cohorts, are showing signs of frugality, Deloitte found. Some 70% said they expect inflation to continue and are compensating by cutting back on some forms of holiday spending, chiefly “self-gifting” and by trading down to more affordable retailers and concentrating on bargain hunting.

Deloitte’s analysts also detected a “notable shift” toward spending on experiences, rather than on physical gifts this year. In fact, experience spending is set to jump by 16% and is a major reason why overall holiday spending will be up, they said.