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How We Spent Our Money in 2022

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If the economic pessimists of the spring and summer were correct, America would already be trapped in a severe and terrible recession that would last until 2023.

However, the December Labor Department data revealed ongoing economic momentum, with earnings and payrolls exceeding expectations once more.

More people are working, and making more money, and unemployment is still around historic lows.

This announcement came just a few days after a record Thanksgiving and online Black Friday spending.

Despite a year marked by the worst inflation in decades, it appears as if Americans knew all along that a recession wasn’t unavoidable and that they could just keep spending.

Americans Shopped Smarter for Needs Rather Than Wants

In June, inflation hit 9%, the same month that petrol prices topped $5. Nonetheless, the July retail sales report revealed that Americans ignored the doomsday recession stories and continued to purchase.

They simply modified their purchases.

According to CNN, spending remained similar, but individuals focused their cash on basics. They bought fewer steaks and more cheap tuna, hot dogs, and chicken, for example.

Consumers have proven to be excellent financial planners and managers. Despite having $2.2 trillion in stimulus funds in their collective bank accounts, they postponed purchases of couches, dishwashers, and even pajama sets, which they had been gobbling up in large quantities in the early days of the pandemic, all without any significant change in month-to-month retail spending at the height of the inflation crisis.

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The Country’s Spending on Impulse Purchases Increased

Although families adopted a needs-based spending approach when prices grew the fastest, caution did not always prevail.

An annual poll conducted by the shopping portal Slickdeals in the spring revealed that 64% of consumers had spent more on impulse purchases than the previous year.

This year, the typical person spent $314 per month on unplanned expenditures, up from $276 in 2021. Interestingly, the average respondent was willing to spend up to $310 on a single unplanned purchase in April, up from $277 the previous year.

But consider the context.

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In April, the year-over-year inflation rate was 8.3%, and 8.3% of $310 equals $26. That brings last year’s $277 purchase closer to $303 today — just $7 short of the $310 mark set for 2022.

Americans were not eager to spend more money on impulse purchases in 2022. It’s because they had to spend extra money to get the same quantity of items that they hadn’t intended on purchasing.

Special Events and Minor Holidays Attracted a Large Number of Revelers

According to National Retail Federation (NRF) reports, Americans mostly ignored grim economic forecasts in 2022. They felt safe enough to spend lavishly on partying and gift-giving on the most exciting and anticipated special days of the year.

The Super Bowl: Individual spending is expected to rise from $74.75 in 2021 to $78.92 in 2022. The total amount spent increased from $13.9 billion to $14.6 billion.

Saint Valentine’s Day: Total spending increased from $21.8 billion to $23.9 billion, with per-person spending increasing from $164.76 to $175.41.

Saint Patrick’s Day: Spending per person increased from $40.77 to $42.33. The total amount spent grew from $5.14 billion to $5.87 billion.

Mother’s Day Observance: Individual spending increased by $220.48 to $245.76, while overall spending increased from $28.9 billion to $31.7 billion.

Fourth of July: Total spending climbed from $7.52 billion to $7.7 billion, with per-person spending increasing from $80.54 to $84.12.

Halloween: Although the NRF did not track individual averages, total Halloween expenditure surpassed last year’s record of $10.1 billion to set a new high of $10.6 billion.

Back-to-school/college: Back-to-school spending increased from $849 to $864 per person, but college expenditure stayed practically unchanged, with a little decrease from $1,200 to $1,199.

Only two small holidays caused shoppers to reduce back. In 2022, the average consumer spent $169.79 for Easter, down from $179.70 in 2021. The total amount spent declined from $21.6 billion to $20.8 billion.

Father’s Day spending fell from $174.10 to $171.79 per person and from $20.1 billion to $20 billion in total, a little decrease from the previous year’s record high.

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People Spent Excessive Sums on Travel and Experiences

Consumers spent substantially less on all types of vehicles in 2022, including automobiles, light trucks, motorbikes, boats, aircraft, and recreational vehicles, but that doesn’t mean they stayed at home.

According to Bureau of Economic Analysis data, the country defied 40-year-high inflation rates by spending heavily on travel and experiences.

Foreign travel by US residents climbed by 89% in the first half of the year compared to the same period the previous year, the largest rise of any travel category.

Spending on air transportation increased by 42%, spending on water transportation increased by 19%, spending on hotels and motels increased by 20%, and spending on ground transportation increased by 14%.

Finally, visitors and revelers paid 12.4% more on package tours and 21% more on spectator amusement event admissions.

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