Experts warn of credit card debt crisis as potential record holiday spending threatens uncertain economy
The National Retail Federation says a record 200.4 million consumers spent money this holiday weekend
Some experts warn of credit card debit, uncertain economy after holiday spending set to break records
More Americans went shopping than ever before over Thanksgiving weekend, a good sign for retailers. But experts say the economy isn't thriving yet.
A recent Fox News poll shows more than 75% of Americans are concerned about the state of the economy. Despite their uncertainty, over 18 million Americans, more than expected, hit the stores for the Thanksgiving holiday weekend.
The National Retail Federation says a record 200.4 million consumers spent money this holiday weekend. Around 44% of shoppers say online was their go-to destination.
"I buy a lot of stuff on TikTok and stuff like that, so I do believe people use their phone to buy stuff more than in person," Ifrah Sultan, from Nashville, Tennessee said.
At the Mall of America, a woman talks with a sales associate at Pandora. "It was bigger than we expected but reflects the resilience of consumers and they're still out there. They're shopping, they're engaged in commerce," National Retail Federation (Copyright: Mills Hayes/Fox News / Fox News)
Black Friday remained the most popular in-person day with more than 76 million shoppers hitting the stores. Despite Cyber Monday sales, the biggest online shopping day this year was also Black Friday. NRF says over 90.6 million people shopped online Black Friday, in comparison to 73.1 million on Cyber Monday.
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"I like to go shopping, I like to look, I like to try on. I hate buying stuff online. My wife, however, buys everything online," Tom Scala, from New Jersey, said.
President and CEO of the National Retail Federation Matthew Shay says we are in an era of blended commerce.
"It's getting much more difficult to distinguish between purely in-store and purely online experiences. It speaks more to the convergence of retail that we've seen taking place across all channels," Shay said.
The National Retail Federation and Prosper Insights & Analytics annual survey found that this was the first year personal care and beauty items were among the top five most popular gifts purchased this weekend. Nearly 50% of the gifts purchased w (Copyright: Mills Hayes/Fox News / Fox News)
Most Americans say they’re worried about the economy.
"I feel like it should be a concern to everybody," Saed Sultan said. "I save. Live below your means, think for the future."
Scala from New Jersey said that it’s been difficult for younger Americans who are entering the job market, like his son and daughter-in-law. They’d love to buy a house, but the interest rates are too high.
"Everything is expensive now, no matter where you go," Scala said. "Everything is inflated. As far as the economy, I hope it doesn’t get any worse."
Holiday spending is forecasted to grow 3-4% this year, totaling over 950 billion.
The National Retail Federation says that sounds bleak but is a good sign.
"On a historic basis, a 3-4% growth is very inline and frankly slightly above trend of the last 10 years before the pandemic. In general, we still see strength and running room and resilience for consumers and expect that to play out for the rest of the holiday season," President and CEO of the National Retail Federation Matthew Shay said.
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George John is a professor of marketing at the University of Minnesota's Carlson School of Management. John says there are a couple of troubling signs for consumers, including high interest rates.
"It’s a mixed picture. Some parts are stagnant, like housing, automobiles, those things have been tremendously difficult, largely because of interest rates," John said. "I think people still feel pretty confident and good about themselves. We’ve come out of a horrible period. But it’s not some roaring economy. Inflation has really hit hard on staples and durables."
The National Retail Federation and Prosper Insights & Analytics annual survey shows 85% of consumers they surveyed had already started holiday shopping before Thanksgiving weekend. (Copyright: Mills Hayes/Fox News / Fox News)
While the NRF says holiday sales are expected to grow 3 to 4% from 2022 to 2023, that is not adjusted for inflation.
"Really once you throw inflation in, we’re kind of treading water, maybe 1%, 1.5% in actual quantity of stuff sold. So, yes, it’s better than last year. But it’s not some kind of blazing thing," John said.
The NRF says they have seen an uptick in "Buy Now, Pay Later" programs.
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"I think it’s an example of the market being responsible to consumer needs and expectations. Giving them flexibility, giving them an opportunity to manage their budget, their spending and do controlled purchases over time," Shay said.
But Professor John says consumers should be cautious about this with higher interest rates.
"That means credit card debt interest rates have peaked also. I think it’s easy to get into credit card trouble at this time of year. So, be careful," John said. "It’s a lot more difficult to pay them off than it was a couple of years ago. So, I would watch out for that."
Many American consumers were concerned about a potential recession after record high inflation.
"What the world holds for us coming next year, it’s what the Federal Reserve does, it’s what consumers feel and there are bad signals and there are good signals," John said.
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The NRF says that while some of the largest shopping days are behind us, there are still significant shopping weekends left in the year.