This holiday season, Santa Claus may not be the only one forced to pull his belt a few notches tighter. Across the United States, consumers are already grappling with the consequences of higher living costs, even before the final remnants of Thanksgiving feasts have been cleared away. As the calendar turns toward Black Friday weekend—a traditional prelude to the peak of the gift-buying rush—the financial outlook for many holiday shoppers appears unexpectedly wintry. According to two detailed reports released by Bank of America, the escalating prices of consumer goods are increasing at a rate that has outpaced the comfort level of both casual shoppers and dedicated gift-givers alike.
The bank’s holiday survey of over 2,000 participants, conducted during late summer, revealed striking apprehension among American households. Roughly 62% of those surveyed confessed to anticipating some level of financial strain linked directly to seasonal expenses. Moreover, 58% remarked that the very notion of gift-giving now feels markedly more expensive than in previous years. Many respondents attributed their growing anxiety to rising costs, and more than half pointed an accusatory finger toward tariffs—import duties that were introduced earlier in the year—as one of the primary culprits.
Bank of America’s analysis supports these sentiments, determining that the tariffs announced earlier in the spring have likely played a significant part in nudging up prices across certain popular spending categories. These include high-demand items such as electronics and jewelry—goods that traditionally account for a substantial portion of holiday gift budgets. Based on the bank’s card transaction data, overall household spending during the holiday period has climbed by approximately 6%. Yet, paradoxically, the total number of retail transactions has experienced a minor decline over the same period. The conclusion is unavoidable: consumers are spending more dollars, but receiving less in return—an unsettling equation that illustrates the quiet squeeze of inflation.
Beyond the overarching figures, the bank’s reports expose a growing divide between income brackets, revealing a widening gulf in how Americans at different ends of the economic spectrum are poised to experience the season’s bounty. Higher-income households continue to display resilient levels of spending and wage enhancement, maintaining an upward trajectory that eclipses that of their middle- and lower-income counterparts. For example, professionals in lucrative white-collar fields—especially those in finance and investment banking—are anticipated to enjoy generous bonus payouts, some of them reaching six-figure sums according to industry forecasts. For these fortunate earners, the holiday glow is likely to remain bright.
For the broader population, however, the narrative is far less cheerful. What should be a joyful season of giving is instead transforming into a source of significant stress at checkout counters nationwide. The bank’s data indicates that electronics spending per individual transaction surged nearly 8% within a single month following the introduction of the spring tariffs, while jewelry purchases rose by about four percentage points shortly after a new round of tariffs in August. Combined with the record-high market price of gold—an upward trend that has substantially inflated the cost of gold-based accessories—the allure of traditional holiday splurges has begun to fade. Where once consumers delighted in finding the perfect gift, many now hesitate at the thought of their thinning wallets.
With expenditures rising but purchasing power shrinking, many consumers are reevaluating their priorities and, perhaps reluctantly, redefining the boundaries of their generosity. Nearly two out of every five respondents (38%) reported intentions to limit their gift lists exclusively to immediate family and closest friends, while nearly a quarter (23%) have already reached agreements with relatives to mutually scale back holiday giving. Among those struggling most acutely with monetary pressure, 87% say they intend to rely more heavily on discount retailers in order to mitigate the impact of higher prices. Additionally, just over half (51%) admitted they would consider purchasing and gifting so-called “dupes”—affordable imitations of high-end or luxury products—as a creative way to preserve holiday spirit without breaking their budgets. Many respondents also indicated plans to begin shopping earlier than in previous years to spread out expenses over time, a strategy designed to soften the blow of accumulating costs.
Further insights from Bank of America’s card data reinforce this uneven economic landscape. Spending by high-income earners rose roughly 3% over the past year, contrasting sharply with less than 1% growth among lower-income households. This disparity mirrors the divide observed in wage progression: after-tax income increased about 4% for wealthier individuals, while those near the bottom of the income scale saw gains of only around 1%. Meanwhile, Goldman Sachs has issued warnings that the broader labor market appears to be weakening, particularly within critical industries such as technology, manufacturing, and related sectors. Such developments could exacerbate the existing pressures on workers already standing at the edge of financial vulnerability.
Ultimately, this convergence of rising prices, stagnant wages, and uneven income growth paints a complex and troubling picture for the coming holiday season. While some segments of the population may celebrate an abundant winter of spending, many others will face tough decisions—paring back their lists, searching for bargains, and reconciling their holiday ideals with tighter financial realities. As inflation continues to erode purchasing power, the question that looms over American households is both humorous and sobering: when the season’s visitors arrive this year, will it truly be Santa Claus descending the chimney with his famed bag of gifts, or a far less welcome figure—the Grinch—bearing nothing but a sharp reminder of inflation’s enduring grasp?
Sourse: https://www.businessinsider.com/consumers-are-feel-spending-strain-holiday-gifting-season-inflation-tarrifs-2025-11
