Economic Confidence Dips As Holiday Spending Plans Collapse Across Income Levels

Washington, D.C. — According to new polling data from Gallup, consumer sentiment in the U.S. has taken a notable hit, dragging holiday-spending expectations downward in tandem. The survey found that the Economic Confidence Index (ECI) slid seven points in November to -30, marking the lowest reading since a -35 in July 2024.

Consumers’ view of current economic conditions has worsened: only 21 % of U.S. adults now describe conditions as “excellent” or “good,” down from 24 % in October and the poorest such rating since March. Meanwhile, 40% say conditions are “poor,” up from 37% last month.

Optimism about future economic improvement has also flagged. Just 27% of respondents believe the economy is getting better, which is “the lowest since July 2024.” On the flip side, 68% say it is getting worse.

Job-market confidence mirrored the broader economic gloom. Only 33% of Americans say this is a good time to find a “quality job,” while 63% call it a bad time — the bleakest reading for this question since January 2021.

Amid this backdrop of eroding confidence, holiday gift-spending plans contracted sharply. On average, Americans now expect to spend $778 on gifts this season — a $229 drop from the $1,007 estimate in October.

That decline is the largest the Gallup trend has recorded between October and November — even larger than the $185 drop seen during the 2008 global financial crisis.

Cutbacks were visible across income brackets: households earning $100,000 or more reduced their spending estimates to $1,230 (from $1,479 in October). Households earning less than $50,000 anticipate spending only $384, down from $651 the previous month. Middle-income earners (those in the $50,000-$100,000 bracket) held at about $842, roughly the same as their October estimate of $847.

However, beyond the raw dollar-figure decline, many consumers are still hedging their bets. Despite the “historic contraction” in projected spending, only 29% of Americans say they plan to spend less than last year (up from 23% in October), while 53% say they will spend “about the same.”

Gallup’s analysts point out that the timing of the poll — conducted Nov. 3-25, with most interviews done before the end of the federal government shutdown on Nov. 12 and before the Nov. 20 jobs report — may amplify the sense of uncertainty.

In the final analysis, the report notes that “consumer attitudes about the job market and overall economy slipped in November to their worst levels in over a year, seemingly chilling their gift-buying mood.”  While the government shutdown is now over, the article suggests that the mood may still linger, leaving retailers and the wider economy to hope for a rebound in consumer sentiment ahead of the full holiday season.

As Americans prepare for winter holidays, the polling suggests that what could have been a robust season of gift-giving may be tempered by a cautious mindset — one shaped by economic unease, labor-market jitters and the lingering effects of national fiscal disruption.

Source:

Gallup.com