Since the COVID pandemic and the supply chain shortages that came with it for a time, the price of all manner of goods has persistently stayed high nationwide, but despite the economic straits many families find themselves in, the 2023 holiday season has seen something of an unexpected spending surge across the country.
Brick-and-mortar stores in the U.S. reported a 1.1% increase on Black Friday over last year’s numbers. Meanwhile, online spending on Black Friday hit an all-time record $9.8 billion.
Cyber Monday, the actual online equivalent to Black Friday, did even bigger business with $12.4 billion in financial transactions. That’s a 9.6% increase over 2022.
The spending has come as something of a surprise to economists in the wake of the Federal Reserve’s interest-rate hike, a measure designed to help the country avoid a recession.
“If 18 months ago, you’d have said the Federal Reserve Bank could raise interest rates by 500 basis points, and the consumer would chug on, relatively unfazed, I would have been extremely surprised,” Ellie Henderson, an economist at UK-based, global bank Investec, told the BBC. “I’d have said, ‘That’s just not how economics works.’”
Some experts are terming the phenomenon “YOLO spending,” as Americans are seeming to putting their enjoyment of the here and now first, despite a general negative outlook on the nation’s economy.
“When you don’t really know what the future holds – or even if there’s a long enough future for you – people are focusing on the present and the short-term horizon,” Chiraag Mittal, an assistant professor of marketing at the McIntire School of Commerce, University of Virginia told the BBC.
“People are choosing to prioritize their happiness and fun.”