Americans spent like crazy during the holidays because of high inflation
Americans upped their spending during this year’s holiday season, as inflation forced consumers to shell out more for retail goods and dining experiences.
US retail sales increased 7.6% during the period of November 1 to December 24, compared to the same time last year, according to the Mastercard Spending Pulse, released Monday. The index tracks in-store and online retail sales, excluding automotive sales, across all forms of payment and is not adjusted for inflation.
The report is a welcome sign after a pullback in consumer spending led to a dip in US retail sales in November, despite a strong turnout for Black Friday. Still, inflation likely accounts for much of the year-over-year rise in holiday spending.
The Personal Consumption Expenditures price index — the Federal Reserve’s preferred measure of inflation — rose 5.5% in November from a year earlier, the Commerce Department reported Friday.
“Consumers and retailers navigated the season well, displaying resilience amid increasing economic pressures,” Michelle Meyer, North America Chief Economist at the Mastercard Economics Institute, said in a statement.
According to Mastercard, consumers diversified their spending to cope with higher prices and prioritized dining out and other experiences. Restaurant sales grew more than 15% compared to the same period last year.
American shoppers also displayed a growing preference for shopping online, with online sales growing 10.6% year-over-year and ecommerce making up 21.6% of total retail sales, up from 20.9% in 2021.