Will consumers spend a little more this winter holiday season with an extra day to shop? In 2023, there are 32 days between Thanksgiving and Christmas, up from 31 days in 2022 and 2 days more than the average of 30 days. A longer shopping period likely means that consumers will stretch out their shopping plans. In the end the extra time won’t matter much if consumers aren’t in the mood to spend, or if they get most of their shopping done early, and/or if they are sticking to their budgets. But if they are feeling generous, getting out to brick-and-mortar retailers could also mean additional dollars spent on travel and entertainment.
Retailers – brick-and-mortar and online – have been promoting holiday sales for months, but the big push started around the three-day shopping period over the Veterans Day weekend. Consumers are likely shopping more online for ease of comparison as they search for bargains. They are also probably doing some early shopping in retail locations in the awareness that store inventories could be limited and some items hard to find closer to the actual holiday. Some will wait for Black Friday sales, or Small Business Saturday, or Cyber Monday for special deals.
Spending over the holiday period also could be more spread out this year due to the timing of Hanukkah which falls on Friday, December 8 through Friday, December 15 as opposed to 2022 when it was closer to the Christmas observance.
Finally, with the Christmas holiday falling on a Monday, many workers are likely to take vacation time to fill out the week and take a long break through New Years Day on Monday, January 1, 2024. Travel, entertainment, and shopping for post-holiday bargains could further influence retail spending in December.
How consumer spending on holiday gift giving and activities will affect GDP growth in the fourth quarter 2023. Third quarter GDP growth beat expectations at a robust 4.9 percent in advance data released in late October. This included a 4.0 percent surge in personal consumption expenditures. While it is unlikely that the fourth quarter performance will match that, consumers have actually kept up their spending despite low readings for consumer confidence. Relief on cooling commodity inflation and improved income for discretionary spending have helped retail activity.
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