How Will Consumers Spend Their Money This Holiday Season? An Economist Explains

13 Dec 2022


For much of this year, the American economy has undergone an unprecedented structural shift. Billions of dollars in spending by consumers moved from goods — the stuff we consume and use — to services. But many of these same services will come under threat in an economic downturn, and risks to industries producing both goods and services will likely last throughout the winter. So where will the economy finally land?

Starting in the spring of this year, consumers apparently became fed up with ordering things online for delivery and consumption at home. They wanted to get out and enjoy services that were only available away from their stuff-filled nests. The weather improved, ballparks opened for spring training, and lo and behold: spending on durable goods, adjusted for prices, was 9% lower in March 2022 than in March 2021, while spending on services was 6% higher.

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