SYRACUSE, N.Y.–The ongoing rate hikes by the Federal reserve will have an effect on consumers this upcoming holiday season, according to one analyst.
Syracuse University Whitman School faculty member and retail expert Shelley Kohan said she expects the rate hikes will specifically affect those shoppers that are more reliant on credit cards.
“For most of 2022, demand has remained strong for consumer goods with the total fiscal retail sales up 9.9% through August,” Kohan said. “While higher prices are part of the sales increase, the rate of increased sales is higher than that of inflation. Simply put, consumers are still spending money.
“The most recent rate hike may have an impact on holiday shopping. Theoretically, higher interest rates will slow down consumer spending, lessening the demand for goods and services. Less demand means greater supply and would lead to lower prices,” Kohan continued. “This may directly impact retailers discounting holiday goods earlier and taking deeper markdowns to ensure inventory is being sold. There is definitely a tricky balance in finding market equilibrium.
‘Deeply Impact’
“The higher interest rates will more deeply impact consumers that are reliant on credit cards to make purchases (and don't pay them off) or have secured a variable mortgage rate. The higher interest rate will impact the disposable income of these consumers, especially in discretionary categories,” the statement continued. “Holiday spending will also be negatively impacted by consumers spending less than last year, higher home heating costs, and possible recession. Holiday sales last year were up 14.1% and while no formal forecasts have been made, the increase this year will not be as robust.”
The Very Best in CU Reporting. Every Morning. To Your Inbox. At a Total Cost of ‘Free!’
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.