Ballpark attendance soared this summer.
Mid-2023 will see Americans' efforts to satisfy their post-pandemic desire for experiences reach a fever pitch.
Keith Gentili said, "Everybody went on tour." The 55-year old New Hampshire resident saw 13 concerts this summer. This was more than he had seen in a year before the pandemic. It was like a big buffet. The buffet was available.
The consumer spending in this year was strong, despite rising inflation and interest rates.
Some economists and consumer analyst predict that after the summer's splurge that these and other pressures could cause thisresilienceto buckle -- perhaps in a meaningful way -- during the critical holiday season.
It could also mean that the holiday budget will look different this year, with a greater emphasis on experiences than in previous years.
Ted Rossman is a senior industry analyst for Bankrate. He said, 'I believe that rationally you would expect some sort of pullback in consumer spending, but we're also seeing so many contradictory signs at the moment'. We see people spending on things like dining, travel, concerts, and sporting events. This is not what we see when people are nervous about the economy.
He continued: "But I think that it shows right now isn't a normal time. I believe we still have pent-up demands from the pandemic and I think many people are saying 'You Know What? He added: 'But I think it shows that right now is not a normal time; I believe we still have this pent-up demand from the pandemic, and a lot of people are saying, 'You know what?
Early surveys suggest that holiday spending may even be higher than pre-pandemic levels.
Matt Kramer is KPMG’s national consumer and retail sector leader. He said that respondents to KPMG’s 2023 holiday study said they planned to spend 5% extra this season.
He said that people will spend less on necessities, because they are cheaper, and this will benefit discretionary categories like restaurants, clothing, and travel.
He said that 'what stands out most' is the 'leaning-in' of holiday travel, and wanting to share those experiences with family and friends.
Tamara Charm of McKinsey & Company’s consumer insight hub said that shoppers will be more price-conscious and deal-seeking this season than they were last year.
She said, "But they will still spend."
She said that the latest [Consumer Pulse] research showed 79% of people are still buying less. "And consumers still say they are going to spend, especially younger and higher-income consumers. The splurge is going towards experiences, travel, out-of home entertainment, fitness, and also self-care.
The Commerce Department released its latest retail sales report earlier this week.
US retail sales increased 0.7% from August to September, marking the sixth consecutive month of growth. The data is adjusted for seasonality but not for inflation.
In September, this inflation did not have a significant impact on sales growth. The Consumer Price Index rose by 0.4% monthly, while goods prices only increased by 0.1%.
The monthly retail sales report can give a glimpse into the American consumer's appetite for goods, but it only shows a part of what they are spending. Sales in service-related industries, other than those at restaurants and bars are not included.
The Personal Consumption Spending data will be released at the end of the month to give a more detailed look at consumer spending.
Gus Faucher is the senior vice president and chief economic officer at PNC Financial Services. He predicts that consumer spending will slow down in the next few months, but not completely disappear.
He said that despite the fact that job growth has slowed from its previous fervent pace, it is still a solid growth.
There's also a lot of bifurcation in the post-Covid K recovery, with wealthier households recovering more than lower-income Americans.
Nancy Vanden Houten is the senior economist at Oxford Economics. She said: 'Our impression is that any savings left are more skewed towards upper-income households.' We think lower-income families will have a hard time keeping up their spending.
She added that this includes Americans facing financial pressures due to the resumption of student loan payments, rising debt, dwindling savings and high interest rates.
The geopolitical situation has become more uncertain.
The list of factors that are complicating and possibly culminating is more than a mere obstacle for the average American family that has a limited monthly budget.
Rossman stated that the economic data was better than many of us had expected. "But I think that there are more and more cracks appearing in the foundation. This is most apparent among those with lower incomes or lower credit scores."
He said: "They're like the canaries of the coal mine."
He said that credit card delinquencies were worse for people with lower scores. Subprime auto delinquencies, he added, are now worse than during the financial crises of 2007-2009.
Matt Schulz is the chief credit analyst at LendingTree.
Some people may have to deal with the restarting of their student loan payments; others may face a job loss, or unexpected medical expenses. He said that every person's situation was different. However, it didn't take long for an otherwise comfortable situation to become a risky one.
He said that despite how well people have handled their businesses over the past couple of years, they will eventually find that the headwinds and challenges they are facing become too much.