Black Friday shoppers leave the Nike store as other shoppers wait in line to shop as retailers compete to make purchases on Black Friday, one of the busiest shopping days of the year, at the Woodbury Common Premium Outlets in Central Valley, New Attracting buyers and trying to maintain their margins York, USA, November 24, 2023.
Vincent Alban | Reuters
Consumer spending remained remarkably resilient in the face of some strong economic headwinds.
According to a recent report from Intuit Credit Karma, nearly all Americans, 96%, are concerned about the current economic situation.
Still, more than a quarter are “doom spending,” or spending money despite economic and geopolitical concerns, the report said.
Although inflation and high interest rates strained budgets, a record 200 million shoppers came between Black Friday and Cyber Monday, according to the National Retail Federation. The NRF forecasts holiday spending will reach record levels this season, reaching as much as $966.6 billion.
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“Similar to doom scrolling, we are seeing people mindlessly shop to allay worries about the economy and foreign policy, which could negatively impact their financial well-being,” said Courtney Alev, consumer financial advisor at Credit Karma.
Even with credit card debt topping $1 trillion, Generation Z and Millennials are particularly vulnerable to this mindset, other reports show.
Instead of cutting spending, 73% of Gen Z say they would rather live in the moment, a recent Prosperity Index study from Intuit found.
High inflation has made it particularly difficult for young professionals. According to a separate Bank of America survey, more than half (53%) of Generation Z said the increased cost of living was a barrier to their financial success.
“Younger adults are feeling discouraged,” said Ted Rossman, senior industry analyst at Bankrate.
“One thing that young adults have going for them, however, is the time advantage,” he added. “Every dollar you put aside increases.” Bankrate also found that Generation Z workers are the largest group of non-savers.
At least strike a balance, Rossman advised. Automate some of your income for savings and build some fun into the budget, he said. “At least then you won’t be paying 20% credit card interest.”
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