December 17, 2020
The holidays look different this year. In addition to traveling less, having smaller gatherings, and gathering virtually, Americans are also altering their spending habits. The latest American Perspectives Survey (APS) shows Americans are being more frugal this holiday season, with some groups being more cautious than others.
Only four percent of Americans will be spending more over the upcoming December holidays this year, while 45 percent said they will spend less and 48 percent about the same. That nearly half the public say they will spend less is hardly a surprise given the affect COVID-19 has had on employment and businesses. The November unemployment rate was 6.7 percent and in the week ending December 5th, 853,000 Americans filed for unemployment, the most since September. The CARES Act, which provided financial relief for both individuals and businesses, ran out of funding at the end of July, and Congress has yet to pass another relief package. With more cities and states shutting down with the rise in coronavirus cases, a reduction in holiday spending is to be expected.
As many surveys have shown, certain groups, especially Hispanic and black Americans, have fared especially poorly financially, while others have been largely unscathed. There are sharp racial divisions in holiday spending this year which reflect the disproportionate effect the pandemic has had. Forty percent of white Americans in the new APS will spend less this year compared to last year, compared to 50 percent of black and 59 percent of Hispanic Americans.
Over time, the amount Americans spend on the holidays has fluctuated. The NPR/PBS NewsHour/Marist Poll began asking about holiday spending in 1996 and the graph below shows the up and downs. In the years following the Great Recession, fewer than 10 percent of Americans said they would spend more on the holidays. In the good economic times around 1999, the number of Americans who said they would spend more than in previous years on the holidays peaked at 15 percent.
Whatever the actual numbers are as retailers make their final tallies of Christmas spending at year’s end, the pandemic has many thinking about the true meaning of the holiday. We are reminded of what Dr. Seuss said in How the Grinch Stole Christmas! . . .
“It came without ribbons. It came without tags. It came without packages, boxes or bags. And he puzzled and puzzled ’till his puzzler was sore. Then the Grinch thought of something he hadn’t before. What if Christmas, he thought, doesn’t come from a store. What if Christmas, perhaps, means a little bit more.”
The authors would like to thank our intern Stephanie Dodd for her work on this blog.