Holiday shopping starts off strong even as many Americans struggle financially

DENVER – The holiday shopping season has gotten off to a strong start, even if the average American’s bank account isn’t doing as well as in years past.

Cyber Monday saw a record $13.3 billion spent in online spending, according to Adobe Analytics. Cyber Week — the five days from Thanksgiving to Cyber Monday — brought in $41.1 billion online overall.

Sasha Breger Bush, international political economist and University of Colorado Denver associate professor of public affairs, explained people may be going into debt to make these purchases.

“I’m always thinking about credit card balances as I read data like that in a context where inflation is relatively high compared to five years ago, and in which families are seeming to spend a fair amount at the holidays,” said Breger Bush. “That’s a recipe for credit card debt, and we are indeed seeing that continue to rise. Delinquencies are at about 9% nationwide.”

More Americans are willing to risk credit card purchases because there is a sense of optimism about the direction of the economy. Republican voters, especially, feel strongly about the economy after the election.

“Folks that stray towards the Republican camp were a bit more optimistic about the economy than folks who strayed towards the Democratic side,” said Breger Bush. “My personal prediction is that we’ll continue to see credit card debts and other forms of household debt, including home equity lines of credit and the like, also increasing. So, the increased spending is coming at a cost.”

Casey Kochenberger, the owner of Blush, a small boutique in Denver’s Tennyson shopping district, has seen the robust start to the holiday season first-hand.

“With the holidays around the corner and people wanting to be more celebratory, business has definitely been up for us,” said Kochenberger. “I think that’s also because of our location. Just in this neighborhood, people love to be neighborly and support their community, and small business is important to them.”

Inspyre Boutique sits just down the street in the very same neighborhood, and they’ve seen similar spending since Black Friday.

“We had a really phenomenal last week,” said Molly Maifield, assistant store manager at the store. “We’ve already seen a lot of people start their holiday shopping, and we had a great week… Overall, I think we’ve had a pretty successful start.”

Denver7’s Ethan Carlson

Overall, trends across the country indicate that the stock market is doing very well, but that doesn’t necessarily mean that most Americans are seeing that boost. According to Breger Bush, 70% of the shares in the stock market are owned by just the top 10% of earners.

“Some Americans feel that wealth effect and other households don’t really see any gains at all,” said Breger Bush. “The wealthier you are, the more likely you are to own stock, and the more likely you are to have a larger proportion of your assets as stock. So as stock prices increase, the benefits are not equally distributed across American households.”

Holiday spending this year seems to be about 7% higher than last year, according to Breger Bush. A significant bump that might be inflated by an increase in shopping with credit, but it’s still not to where the country was five years ago.

“Now is holiday spending back to where it was prior to the pandemic? No, probably not. I don’t know when we get there,” said Breger Bush.