How holiday shopping sales predictions are masking the strain on family budgets

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00:00How are you guys doing today?

00:02The steady hum of shoppers, greetings at the door, and displays packed with new merchandise

00:06set the scene inside stores as customers begin holiday shopping.

00:11People are coming in and buying more stuff.

00:13So when they see more, they like to buy more, especially just little gadgets and things like that for gifts and presents.

00:20But Rachel Mulatto, store manager at the Omaha, Nebraska shop, Ashley's,

00:25is one of many retailers who have seen shifts in buying habits this year.

00:30A lot of things are selling out quicker than last year.

00:38Nationwide, the National Retail Federation expects holiday shopping to hit $890.49 per person,

00:45the second highest level on record, just $12 shy of last year.

00:50Thanks so much for coming in.

00:51But does that line up with what many households across the country are experiencing?

00:56Not exactly.

00:57In recent weeks, the government shutdown led to SNAP benefits being delayed and federal workers going weeks without pay,

01:04on top of an unemployment rate on the rise.

01:07All these uncertainties make consumers hesitant to spend.

01:12And for small businesses trying to make it through the season, that hesitation is hard to miss.

01:17At Dust Goods and Gifts in Omaha's little Bohemia neighborhood, owner Abby Massey says this year feels heavier than most.

01:25I think there's, the people who are shopping are really wanting to shop local.

01:31There is another big push for that shop local, kind of similar to 2020.

01:36It does feel hard this year, harder than other years.

01:40She says foot traffic is steady, but spending isn't.

01:44People are definitely spending less.

01:46We've had to kind of rethink what sort of items are in the store.

01:50And what Massey is seeing on the ground lines up with national trends.

01:54It just doesn't feel like it ever gets easier and you just have to, like, keep grinding.

02:00A new Wallet Hub holiday survey shows this season feels very different than the sales forecast.

02:05Nearly two in three Americans say the economy will make the holidays less fun this year.

02:1185% say they'll spend the same amount or less than last year.

02:1433% plan to apply for a new credit card just to cover holiday shopping.

02:20And over a quarter of Americans are still carrying holiday debt from last year.

02:24Labor market is crucial.

02:26So if people don't have jobs, people don't have income, people will not spend.

02:31And firms will not be able to sell any goods.

02:34So it's a cycle.

02:35Economists are watching these trends closely, including Jane Liu, assistant professor of economics at the University of Nebraska-Omaha.

02:43The labor market is weak, inflation pressure is still high, and the new job openings are decreasing.

02:50Liu says that combination is weighing on holiday spending.

02:53Consumers are looking for values, especially for low-income and medium-income households.

03:00But for high-income households, we don't see that, especially high-income consumption for luxury trips, vacations.

03:09Those consumption are still very strong.

03:11And the Federal Reserve notes a similar pattern that expands well outside of Nebraska,

03:16with the Beige Book reporting softer consumer spending and more selective shopping in many communities.

03:22At Ashley's, Mulatto says that doesn't mean the sales floor is quiet.

03:26It just means the work that goes into setting the floors, buying merchandise, studying trends, has to be very intentional.

03:33We like to really think about the customers and what they're looking for.

03:37Those customers are looking for deals, Liu says.

03:41And that reflects a national trend.

03:43Many shoppers are turning to credit to boost their holiday budgets.

03:47Credit is still easy to access, especially with the recent interest rate cut.

03:54All right, $7.47.

03:56As families endure a tougher economic season for the holidays, economists are paying close attention to what comes next.

04:03People generally expect in 2026, the economic outlook tend to be optimistic.

04:10People expect more jobs will be created.

04:13Have a nice day.

04:14For Straight Arrow News, I'm Kayleigh Carey.

04:16For more SAN Originals, download the Straight Arrow News mobile app or visit SAN.com.

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