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The consumer is the main engine of the American economy. That’s you! And me. No pressure.

Consumers have shown a remarkable willingness to spend despite elevated inflation for years now, even if they’re increasingly unhappy about it. That trend continued into this fall, and we’ll dig into the numbers below, but can we keep it up through the holiday shopping season? My colleague Kristin Schwab looked into it. — Tony Wagner, newsletter editor
Pedestrians pass a holiday display.
Spencer Platt/Getty Images
Consumers expect to spend as much or more this holiday season compared to last year
And it’s not because they’re feeling generous.
When you have six kids, someone always needs a new something.

“It’s expensive,” said Julie Yang, who lives with her husband and family in Minnesota, and spent about $800 on school supplies and clothes this fall. “I was like oh my god, I can’t believe how much we’re spending on back to school stuff because Asher is growing constantly and then Isla’s sprouting like crazy, too.”

Harvey, who’s seven years old, gets a lot of hand-me-downs, which helps because everything is more expensive these days. Filling up the family van costs $100 alone. So this year, they’re going to stick to a budget for Christmas. Actually, rumor has it Old Saint Nick is dealing with inflation, too.

“Uh, mom and dad and Santa Claus talked about it,” Yang said. “We’re just going to do either one really big thing, or we’re just going to do a lot of little small stuff.”

Most families begrudgingly plan to spend as much or more than usual on the holidays this year, according to the consulting firm Accenture, which has been surveying thousands of Americans for 20 years now.

Yet that spending is not enough to make companies feel confident, because a lot of the increase is inflation . In other words, real spending may be flat.

Kelly Askew, global retail lead for Accenture, said shoppers are anxious about their budgets but realistic about prices.

“It doesn’t mean that when December rolls around and I’m out in a mall and I’m feeling festive I’m not going to pull out my credit card for one more purchase,” he said.

So, shoppers are trying to plan ahead and spread out the financial pain. 20% started tackling their holiday lists before August. 90% will start before Black Friday.

“They’re becoming more thoughtful about what they buy, they’re searching for value,” Askew said. “And they’re making deliberate tradeoffs.”

Early shopping is music to any retailer’s ears. It’s easier to manage inventory, and a longer shopping season could coax consumers into spending more overall.

“And so discounts have begun,” said Simeon Siegel, consumer equity research analyst at Guggenheim Securities.
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News you should know
Let’s do the numbers
  • Strong earnings reports gave Wall Street a boost even as tech stocks faltered. The S&P 500 closed 0.3% higher, the Dow surged 1.1% and the tech-heavy Nasdaq rose 0.1%.

  • Wholesale prices rose 1.3% in September, 6.3% year-over-year. That’s the biggest jump since 2022, when consumer prices were surging.

  • Retail sales rose 0.8% in September, more than expected even after a big splurge in August. Spendings at restaurants and furniture stores rose, but not nearly as much as gas stations.

  • Even though grocery prices are rising about half as fast as the consumer price index, food is still up about 30% since the pandemic. Eggs and bacon are down lately though.
Tech
  • Big early adopters like Meta and Walmart are reportedly rolling back artificial intelligence use after tangling with errors and inefficiencies. Still, KPMG’s CEO survey found 4 in 5 plan to invest heavily in AI over the next three years.

  • Long before the FBI arrested a former OpenAI employee this week for bugging a conference room, the biggest AI companies have been training workers to fight corporate espionage. 
The Trump administration
  • Ukraine resumed strikes on Russian oil refineries in defiance of President Donald Trump, who made a deal with Moscow to buy Russian diesel in a bid to bring prices down.

  • The Washington Post obtained a secret list of donors to Trump’s $330 million ballroom project. Apple and Nvidia, who have each secured deals with the White House to do business in China, gave $25 million each. Here’s a gift link to the full list.
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QUOTE OF THE DAY
“You're always the underdog trying to do the next best thing. And that's, I think, the biggest competitive edge for sure."
— Merzin Tavaria, the co-founder and president of DNEG
DNEG isn’t a household name, but the visual effects studio has won eight Oscars for its work on movies like “Dune” and “The Odyssey.” After starting from a garage, Tavaria now employs thousands across the globe. We visited DNEG in Mumbai as part of our series “The Age of Work.”
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Jake Bauers walks through the Brewers dugout.
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Final note
It's more than a game
The Milwaukee Brewers are one win away from sweeping Marketplace’s hometown team, the Los Angeles Dodgers, and advancing to the World Series.

Jake Bauers hit a two-run homer in the seventh last night to secure the Brewers lead, and he’s had a great run since nearly retiring from professional baseball two years ago.

“To be completely honest, the only thing that brought me back was my wife got pregnant,” he said in a postgame interview. “We need health insurance for these kids.” 

Getting in the door for tonight’s game will actually cost you less than the parking at Dodger Stadium, but it’s free to read our explainer on how health care became tied to employment.
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