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Strong consumer demand persists despite high prices, with Americans expecting to spend more on holiday shopping this year.
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Americans plan to spend an average of $2,800 this holiday season—an increase of more than $1,000 from last year.
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Tariffs and lingering high prices are prompting 62% of shoppers to change how they shop.
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However, retail sales are projected to surpass $1 trillion this holiday season, signaling strong consumer demand, even amid cost pressures.
The holidays are here after a bumpy year for the U.S. economy, and Americans still expect to spend far more this year than they did in 2024.
Shoppers anticipate spending $2,800, on average this holiday season, up more than $1,000 from last year, according to a BMO survey of 2,500 people. Out of all the generations, millennials expect to spend the most—about $4,400. Meanwhile, Baby Boomers anticipate spending the least— $1,600.
While inflation has fallen from its recent peak in the summer of 2022, high prices continue to weigh on consumers. As of September, prices have risen 3% year-over-year, in part, due to tariffs imposed by the Trump administration on imported goods.
Accordingly, more than three in five (62%) BMO survey respondents said they were changing how they shop due to tariff-related price uncertainty.
Shoppers may find their dollars don’t stretch as far this year, even if they’re spending more, thanks to tariffs and inflation. Smart shopping—comparing deals, planning early, and watching for sales— will be key to keeping budgets on track this holiday season.
To make shopping more affordable, respondents said they planned to use strategies like shopping for sale and clearance items, buying cheaper gifts, and opting for more affordable brands.
For consumers interested in sales, Black Friday, in particular, can be a boon. A report from the National Retail Federation (NRF), a trade association for retailers, predicts that a record number of consumers will shop this coming Thanksgiving weekend.
“The holidays are an important part of many consumers’ budgets, and that trend is especially true this season,” said Katherine Cullen, NRF Vice President of Industry and Consumer Insights.
Although consumers report feeling squeezed by higher prices, holiday spending is still expected to rise this year. The NRF estimates that retail sales in November and December would top $1 trillion, up from $976.1 billion in 2024.
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