US shoppers are coming out in force this holiday season, but the festiveness is being tempered by inflationary pressures that have abated but not completely faded. After the sticker shock during the latter stages of the pandemic, a familiar frustration has settled in towards consumer prices that remain broadly elevated even if they have stopped rising rapidly. Americans are "ready to open their wallets this holiday season," said the Conference Board ahead of Black Friday -- the day after Thanksgiving, which this year, falls on November 28 -- that traditionally sees US stores kick off the Christmas shopping season with steep discounts.
"US consumers plan to spend more than last year, but inflation reduces how far their dollars can go." In this environment, nobody expects to pay the full price for items. "Holiday shoppers are likely to increase their budgets this year versus last year but remain selective and are looking for discounts," said a note from Morgan Stanley.
The investment bank's survey found that 35 percent planned to spend more this holiday season. But nearly two-thirds would skip a purchase if an item is not adequately discounted, meaning a price cut of more than 20 percent. "It's gonna be a good year, but I don't think that growth is going to be spectacular because consumers are still under pressure," predicted Neil Saunders of GlobalData.
Inflation remains above the Federal Reserve's two percent long-term target, rising in October to 2.6 percent on an annual bas.
