US shoppers are coming out in force this holiday season, but the festiveness is being tempered by inflationary pressures that have abated but not completely faded.
After the sticker shock during the latter stages of the COVID-19 pandemic, a familiar frustration has settled in toward consumer prices that remain broadly elevated even if they have stopped rising rapidly.
Americans are “ready to open their wallets this holiday season,” said the Conference Board ahead of Black Friday — the day after Thanksgiving, which this year, falls on Nov. 28 — that traditionally sees US stores kick off the Christmas shopping season with steep discounts. “US consumers plan to spend more than last year, but inflation reduces how far their dollars can go.”
Photo: Samuel Corum, AFP
In this environment, nobody expects to pay the full price for items.
“Holiday shoppers are likely to increase their budgets this year versus last year but remain selective and are looking for discounts,” Morgan Stanley said in a note.
The investment bank’s survey found that 35 percent planned to spend more this holiday season. But nearly two-thirds would skip a purchase if an item is not adequately discounted, meaning a price cut of more than 20 percent.
“It’s gonna be a good year, but I don’t think that growth is going to be spectacular because consumers are still under pressure,” GlobalData managing director and retail analyst Neil Saunders said.
Inflation remains above the US Federal Reserve’s 2 percent long-term target, rising to 2.6 percent on an annual basis last month from 2.4 percent in September. But that’s significantly below the peak level of 9.1 percent in June 2022.
“There is still a perception among consumers that things are quite difficult,” Saunders said. “So people are being quite cautious and careful in their spending.”
How US president-elect Donald Trump’s looming presidency will affect inflation remains to be seen. Industry groups have warned that tariffs favored by the Republican could reignite pricing pressures.
The National Retail Federation (NRF) projected that a Trump tariff proposal floated during the campaign would dent US consumer budgets by as much as US$78 billion annually.
But while tough potential trade actions are already preoccupying Washington trade groups, tariffs are not on consumer radars for this shopping season, Saunders said.
One challenge this year will be the shortness of the season. Black Friday falls at the latest possible date on Nov. 29, shortening the stretch between Turkey Day and Christmas on Dec. 25.
But the impact of that dynamic on this year’s sales should not be overstated. Retailers in recent years have pulled the holiday shopping season ahead, with some vendors launching online “Black Friday” promotions as early as October.
Among the companies that have already begun discounts: the big-box chains Walmart Inc and Target Corp, electronics giant Best Buy Co and home-improvement retailer Home Depot Inc. Amazon.com Inc officially launched “Black Friday Week” on Thursday last week.
The NRF has projected holiday spending growth of between 2.5 and 3.5 percent in this season compared with the year-ago period, to as much as US$989 billion over the two-month period.
Economists with the trade group have pointed to an easing of gasoline prices as a supportive factor.
Online sales are projected to grow as much as nine percent this season, extending a long-term trend. Black Friday itself has become a big occasion for online shopping, along with “Cyber Monday” three days later.
“Over time, we’ve moved from a period where it was just Black Friday, and maybe a little of the weekend, to it being a period of discounting that starts very early,” Saunders said. “It’s seasonal discounts.”
There has been a diminishment of “doorbuster” sales that are known to draw hordes of waiting crowds, sometimes resulting in injury or worse. Instead, increasing numbers of consumers are spreading out their purchases or opting to click through Black Friday promotions at home.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS