Americans are expected to shell out roughly $25.9 billion on Valentine’s Day, marking one of the highest spending years on record despite inflationary pressures and the looming possibility of a recession, according to a survey from the National Retail Federation.
The average lovebird will spend $192.80 on their significant others, marking a 10% increase from $175.41 last year and the second-highest figure since the group began tracking spending on the holiday nearly two decades ago. Roughly $14 of the $17 rise in spending per consumer will be used for pets, friends, co-workers, and teachers rather than significant others.
“Valentine’s Day is a special occasion to shop for the people we care most about,” National Retail Federation President and CEO Matthew Shay remarked. “This year, as consumers embrace spending on friends and loved ones, retailers are ready to help customers celebrate Valentine’s Day with memorable gifts at affordable prices.”
Virtual shopping is the most popular mechanism for obtaining gifts, according to the trade association, with 35% of respondents indicating that they will use online stores. Roughly 32% of respondents plan to “give a gift of experience,” marking an increase from 26% last year. Men were especially more willing to offer an experience-driven gift.
The findings occur as inflation remains elevated relative to recent years, but somewhat mitigated in comparison to record highs last summer. Price levels declined slightly last month amid a decrease in energy prices: year-over-year inflation fell from 7.1% in November to 6.5% in December, marking the largest overall decline in nearly three years even as food and shelter prices continue to increase, according to a report from the Bureau of Labor Statistics.
Retail and food services sales reached $677.1 billion in December, adjusted for holiday and seasonal variations, according to an advance estimate from the Census Bureau. The metric nominally increased 6% relative to levels recorded one year earlier; the reading, which was not adjusted for price levels, was therefore eclipsed by inflation.
Data from the National Retail Federation also indicated that Americans spent record amounts during Christmas and the winter holidays, even as many American households made their expenditures using record amounts of debt. The average amount of obligations among those who spent beyond their means rose to $1,549, marking a 24% increase from the previous year, according to a survey from LendingTree. The percentage of debtors who expect to take five months or more to pay off their debt rose from 28% to 37%.
The global economy has experienced lackluster performance even after lockdowns and public health mandates ended across the world. Most analysts believe this year will see a recession in the United States, a reality that would follow one of the worst stock market performances in modern history last year, while some are more optimistic. Bank of America Chief Investment Strategist Michael Hartnett said in a report that a recession will occur in the first half of the year before markets attain a “much more solid footing,” while an outlook from Goldman Sachs Chief Economist Jan Hatzius noted analysts at the company believe “there are strong reasons to expect positive growth in coming quarters.”