Consumers are carrying more credit card debt compared to two years ago, reported The Wall Street Journal.
The debt rose 15 percent since the end of 2021, the largest jump in over 20 years.
Additionally, credit card interest rates are higher at almost 21 percent, compared to about 15 percent in early 2022. For the first time, America’s collective credit card debt passed $1 trillion.
Deloitte is predicting the slowest holiday season since 2018 with sales likely to rise by 3.5 and 4.6 percent over last year. (Sales rose 7 percent last year). Reuters points out that Walmart said it is also cautious in approaching the holidays this year due to the restart of student loans, gas prices inching up and high interest rates. Macy’s also warned of cautious spending and Best Buy said consumers are looking for bargains.
Barron’s newsletter Wednesday said lower income Americans are cutting back, middle-income consumers are downscaling to less expensive products, but the wealthy are still spending.
That said, there are also more optimistic forecasts. PwC says consumers will increase holiday spending by 7 percent this year. It forecasts an average of $1,350 will be spent on gifts. But those with household incomes of $120K or more will spend over $3,000 on average for the holidays.
Buying from a smartphone will increase to the point that more people shopping on line will do so from a smartphone or other mobile device.
Adobe Analytics said consumer spending for the holidays will increase by 4.8 percent due to heavier promotions, said Reuters.
Consumers will be looking for bargains. Discounts are expected to the tune of 30 percent on electronics, 35 percent on toys and 25 percent on clothes, said Adobe.
The National Retail Federation predicts holiday growth of 4 to 6 percent and said the average holiday sales growth year over year prior to the pandemic was 3.6 percent.
Source: The Wall Street Journal, PwC, Deloitte, Annuity.org, MoneyGeek, Reuters, National Retail Federation
Photo: NRF
