Image Source: Holiday shoppers plan on cutting back on spending and piling on even more debt this year, and nearly a quarter of Americans still haven’t paid off their debt from last year’s holiday spending spree.These were just a few revelations in a recent that indicates American consumers aren’t quite as “resilient” as pundits and government people would have you believe.You can’t listen to mainstream financial media for very long without hearing some talking head or government official gushing over the “resiliency” and “strength” of the American consumer. This is one of the reasons has become all the rage. This is a Goldilocks scenario that features the death of inflation without a major recession.Why has this become the dominant narrative? Because the Federal Reserve pushed interest rates to over 5%, and Americans are still spending money.But nobody ever stops to consider how consumers are maintaining their spending. The reality is the “resilient” American consumer is .As prices skyrocketed last year, Americans . Aggregate savings peaked at $2.1 trillion in August 2021. As of June, the San Francisco Fed estimated that aggregate savings had dropped to $190 billion.In other words, Americans ate away $1.9 trillion in savings in just two years..As Peter Schiff pointed out in a podcast, consumers spending money on credit cards in an inflationary environment doesn’t indicate that the economy is thriving, and it doesn’t mean Americans are on a spending spree buying more stuff.
In many cases, they’re buying a lot less. They’re just paying more. And they’re buying fewer of the things that they want because they’re paying more to buy the things that they need.”
This appears to be the case as we enter into the 2023 holiday season. In fact, the WalletHub survey reveals that many American consumers aren’t resilient. They’re desperate.Here are the highlights – or should I say lowlights.
More than 1 in 3 Americans (34%) are foregoing gifts this year due to inflation.
Half of Americans said Santa would be less generous this year due to inflation
Nearly 1 in 4 Americans (24%) still have holiday debt from last year.
Nearly 1 in 5 people (19%) will apply for a new credit card to help with holiday shopping.
Nearly half of Americans (47%) say their charitable giving is affected by inflation.
28% of people will spend less than last year on their holiday shopping.
Meanwhile, that Cyber Monday purchases made using buy now, pay later services were expected to surge 19%, and Klarna reported a 29% increase in buy now, pay later purchases on Black Friday. This is a way to pile on more debt even with maxed-out credit cards.Despite what the mainstream pundits tell you, Americans are struggling due to rising prices. They’ve blown through their savings. They are maxing out their credit cards. The landing isn’t going to be soft. It’s going to be a crash. It’s only a matter of time.More By This Author:The Fed Is Losing Billions And It Could Take Four Years To Make It Up Deutsche Bank Economists Say The Fed Will Create More Inflation In 2024 Chinese Investors Turning To Gold
