Holiday Shopping Is Up, Only Because of Higher Prices: CNN

Americans, enraged about years of rising prices, are going into the 2025 holiday shopping season prepared for battle.

Holiday shopping data on Black Friday and beyond may give a somewhat rosy picture of the economy, even if headlines fail to expose its uglier side.  

But this season could look a lot stronger than you’d expect — on paper, anyway, David Goldman wrote in an analysis for CNN Business.

How’s that possible? High-income consumers keep spending as if they’ve never heard of the affordability crisis people keep talking about. But middle- and lower-income shoppers, despite declaring they’re fed up with their financial situations, are still spending in aggregate.

That’s prompting forecasts for flat or even slightly higher retail sales growth in 2025 — Mastercard forecasts a 3.6 percent rise in overall holiday spending this year. But people are spending more in part because prices are higher.

Stubborn inflation, combined with already high prices, has forced shoppers to shell out more for the holidays, pushing spending numbers upward.

“Holiday shopping is far from full swing, but spending shifts are already surfacing,” said Vicki Hyman, communications director at Mastercard, in a recent report. “Inflation is expected to be a larger contributor to sales growth, as opposed to actual sales volume.”

That’s why holiday shopping data on Black Friday and beyond may give a somewhat rosy picture of the economy, even if headlines fail to expose its uglier side.

“Low-income and high-income households are often living in two different worlds — and experiencing two different economies,” Joe Wadford, senior economist at Bank of America Institute, told CNN.