Americans are planning to increase their holiday spending this year, according to a Gallup poll, which believes Christmas spending in 2023 will be the highest on record since they began collecting data in 1999. The average American estimates they’ll spend on Christmas or other holiday gifts is $975, which is up from last year’s estimate of $923. The largest increase is seen among middle-income households and younger adults, with middle-income households planning to spend $947 on average, up more than $200 from last year. This increase in spending intentions runs contrary to the implications of Americans’ continued pessimism about the economy and ongoing cost of living crisis.

The increase in holiday spending intentions could reflect consumer interest in retailer promotions that kicked off ahead of Black Friday and strong year-over-year growth in sales. Additionally, a recent analysis by the San Francisco Federal Reserve found consumers holding significant, albeit dwindling, “excess savings,” meaning they are prepared to open their wallets over the holiday season despite their budgets.

The holiday season is a multi-billion-dollar event for the retail and travel & hospitality sectors, multi-trillion perhaps when everything is calculated. Nine in 10 Americans plan to partake in holiday shopping. We saw Black Friday through Cyber Monday sales reach new highs, and spending on retail alone between November and December is expected to reach $966.6 billion. Simply put, Americans prioritize the holiday season as indicated by spending habits.