Peggy Stover, professor and director of the University of Iowa Marketing Institute, was one of 80.3 million Americans to hit the stores this Black Friday. But instead of shopping, Stover took note of what other people had in their carts. 

She made a notable observation during her outing — on a day known for big-time discounts and increased consumerism, shoppers weren’t taking advantage of lower price tags in the same way as usual. 

Stover said this year, consumers were sticking to the basics. 

“Huge packs of toilet paper, paper towels, everyday things,” Stover said. “[Shoppers] weren’t splurging on things that people would normally buy for the holidays.”

The holidays are an expensive time of year for many Americans. Now, in a time where prices are high and jobs are hard to find, having enough cash to cover additional costs has become more of a luxury, she said. 

Stover’s anecdote rings true for consumers across the country. Chime, a mobile financial technology company, asked 5,000 Americans what the gift at the top of their holiday wishlist is.

Overwhelmingly, cash was the number one request. Second was wearables — such as clothes, jewelry, and accessories. Third on the list was “essentials,” such as help with utility payments, which were requested by 58 percent of respondents. 

According to Gallup, the average person plans to spend roughly $1,000 on gifts this year, a number that hasn’t changed since last holiday season. 

Stover said while the number isn’t decreasing, the amount people will be able to buy with the same amount of money has certainly gone down. This will lead to consumers sticking to essentials instead of looking for extravagance this time around. 

Madison Mitchell, a second-year UI student, said she hasn’t noticed the price hike yet this holiday season. She said gifts are an expense she would incur regardless of the price tag, so she doesn’t pay much attention. 

“Purchasing gifts for everybody during the holidays is really expensive, no matter what, especially if you don’t plan ahead,” Mitchell said. 

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She said the most difficult part of holiday shopping is figuring out what her family members want and where to get the best deals on those products. Mitchell said since she buys most of her gifts at the same time and it makes a hefty dent in her bank account. 

Economy paints a mixed picture

While total spending hasn’t necessarily increased, a study by Bankrate, a consumer financial services company,  found 78 percent of holiday staples cost more this year than they did during the 2024 holiday season. Candy prices have increased by 9.8 percent, while meat prices have increased by 8.4 percent, according to the study. 

Stover said tariffs will make an impact on common holiday gifts, many of which are imported from China. Xbox is one household name experiencing price hikes, as the price tags on the popular gaming consoles have jumped twice this year. The Xbox Series X, for example, has seen a $150 increase in six months.

According to the Peterson Institute for International Economics, the average tariff on Chinese exports to the U.S. is 47.5 percent, as of the most recent data released on Nov. 10. 

Stover said public perception of tariffs also makes an impact. 

“Consumers have grown wise to the fact that a tariff is an expense that eventually they’re going to incur, and it’s not something that a manufacturer is going to absorb,” she said. 

Adobe Analytics projected a 5.3 percent increase in spending this season, which makes an alternate claim — that holiday budgets are higher than ever. 

Despite this increase, Stover said the data hasn’t been adjusted for inflation and does not accurately represent the situation. 

“Everything looks rosy on paper, but you need to take into consideration that things are a lot more expensive than they were last year,” she said. 

UI Economics Professor Anne Villamil said in a statement to The Daily Iowan that data on the current state of the U.S. economy provides a mixed picture for this year’s spending season — the months of November and December — which she said is offset by a spending slowdown in January and February. 

Villamil said while the gross domestic product, or GDP, growth sat at 3.8 percent in the second quarter, which demonstrates a 0.6 percent increase from the first quarter, prices remain high, and other factors, such as inflation, the government shutdown, and the job market, lead to consumers’ decreased willingness to spend.  

GDP is the value of all services and goods within a country, and serves as an essential indicator of economic growth and health. 

Inflation is at 2.8 percent, exceeding the U.S. Federal Reserve’s goal of 2 percent. Villamil said inflation has been on a downward path since the surge that followed the pandemic, but the current decrease is slower than the initial decline.  

Villamil said unemployment is at 4.4 percent — a low number by historical standards — but the wary job market still makes a critical impact on spending. She said finding a job has become increasingly difficult. 

According to Federal Reserve Economic Data, employer hiring hit 3.2 percent, its slowest rate over 12 years, in October, excluding rates from early in the COVID-19 pandemic. 

Stover said consumers spend according to their mood during the holiday season, which she said is apprehensive this year due to the job market and job cuts, as more than 1.1 million private sector jobs and 200,000 federal positions were lost. 

“[Consumers] are being very cautious in their spending going into the holidays,” Stover said.