Americans are reportedly planning to skip Christmas shopping this holiday season, thanks to President Joe Biden’s failed economic policies to prevent inflation.
According to the U.S. Commerce Department, consumers are spending less ahead of the holiday shopping season due to high borrowing costs and the restart of student loan repayments.
“People are starting to change where they’re spending,” said Meagan Schoenberger, a senior economist at KPMG. “So, spending on big-ticket items like motor vehicles or housing-related items, so things that need to be financed, those are the hardest hit, whereas other areas are at least flat or doing a little better.”
Consumers also seem to be a little more frugal with their money compared to the summer, when they spend heavily on concerts, dining out, and vacations. It did, however, help the economy grow by about 5 percent in the three months leading up to September.
“The summer was a red hot pace for spending for the consumer. September was revised up to almost a full percent just in that month. So slow down in October is not necessarily that big of a surprise, especially with the resumption of student loan payments,” Schoenberger continued.
The economist further observed that for the first time since the pandemic, over 26 million student borrowers started making loan repayments, starting with interest payments in September and loan principal the following month. According to some researchers, that may set households back $200 to $300 per month, or around 5 percent of the median earnings in the country.
Despite this, data shows that Americans continued to go out to eat for dinner, possibly to take advantage of the last few days of summer, and spending on dining establishments and food services increased marginally.
There were also signs that consumers were starting to spend a little bit more at pharmacies and pharmacy stores as the cold weather began to spread across the nation. They were still spending money online, especially on electronics.
“The exception here is electronics and also health and personal care stores because of the larger waves of respiratory illnesses that are popping up around right now,” Schoenberger concluded.
