Shoppers are ready to spend their money this holiday season, according to the latest Spending Pulse insights from Mastercard, which projected that spending during the holiday season, between November 1 and December 24, 2024, is expected to climb 3.2 percent compared with the same time period in 2023. The report stated that current economic trends have left consumers with “less of a cushion this season.” 

In 2023, according to Mastercard data, U.S. holiday shoppers were focused on taking their power back. This year, however, it is expected shoppers will be making similar spending choices but will be feeling the financial pinch.

The report revealed several factors influencing spending habits this holiday, including slowing nominal wage growth. Easing interest rates are expected to spur spending, along with disinflation, which has brought the price of some goods down in 2024.

A shorter shopping season may impact sales this year; however, many consumers have already begun online shopping. It’s predicted that online retail sales will grow by more than 7 percent this year, compared with 2023. 

Additionally, prices for typical holiday items, including electronics and appliances, apparel, sporting goods, personal care products and jewelry, have been either declining or increasing modestly over the last year, according to study data. 

Overall, the report finds that households with financial and real estate assets have experienced significant wealth appreciation since the fourth quarter of 2019, with the value of financial holdings up 31 percent and real estate holdings up 49 percent. 

This can differ from household to household, however, benefiting homeowners locked in historically low mortgage rates before 2022. The report noted that those who recently purchased a home, a car or have student debt may experience a significantly higher debt burden, tightening holiday purse strings. 

The report noted that the Mountain and Sunbelt states have experienced strong in-migration and have healthier economies with greater business formation and job creation, which may impact holiday sales. Meanwhile, areas like the Northeast and Midwest, which have been struggling financially, may have a slower shopping season.