By: Kyle Baltuch, SVP of Equality of Opportunity, Florida Chamber Foundation
The State of This Holiday Season
While many across Florida just wrapped up a great thanksgiving and are looking forward to the continuation of the holiday season, celebrations may look a little different in those households facing financial hardship across Florida.
The latest data released from the Bureau of Labor Statistics point to inflation hitting a mark of 8.1% for the southeast region over the past 12 months. This is compared to a relatively high rate of 6.6% in 2021 and a rate of 1.3% in 2020.
What does this mean? Very simply, the holiday season is dramatically more expensive than it has been in the past. This reality will not only have a deep impact on those with the least amount of expendable income but also on the economy as a whole.
Impact on Low-Income Families
A recent Gallup Poll explored the relationship between the rise in costs of everyday goods and financial hardships experienced within the household. What did it find? Nearly three-quarters of all American households making less than $48,000 per year reported inflation as the main driver of financial hardships. To combat those financial challenges within the household, families have reduced spending on essential items, travel, entertainment, and eating out. Additionally, a report from Deloitte found that shoppers plan to purchase nearly half the number of gifts as compared to last year, while still fearing they will spend just as much money.
Overall, this lack of spending may cause a down holiday for some households, while also having a significant impact on retail businesses.
Impacts on the Economy
With spending expected to pace below inflation, and shoppers planning to reduce consumption, companies are bracing for the potential impacts of the inflated holiday season. In fact, some of these deep cuts have already been experienced. A report from the Wall Street Journal found that retail giant Target experienced a 90 percent decrease in third-quarter financial results compared to 2021.
Additionally, seasonal employment has decreased as a response to uncertain economic conditions. A study by Marketplace found that retail stores have hired roughly 25% fewer seasonal workers so far this holiday season compared to last year.
With businesses facing the potential fallout from a lack of spending, and workers experiencing fewer opportunities in the job market, conditions may only worsen as we head into the start of 2023.
While the holiday season is a time for joy, be sure to keep in mind those that may not have the same experience this season. To overcome these challenges, it is essential for the business community to come together and support those communities with the greatest needs, and ensure sustainable pathways toward prosperity are implemented for long-term change. Economic uncertainty is a reality that Florida and our country will face at times in the future, but how individuals are able to react to it is a direct outcome that speaks to one’s opportunities.
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If your business is focused on the future of Florida, and securing the path to prosperity for ALL Floridians, connect with me via email at email@example.com, or by phone at 850-521-1218.