Election Results May Shift Your Holiday Spending Confidence — Here’s Why
November’s midterm elections are arriving right as households are deciding just how much they can afford to spend during the holidays on everything from big family meals to travel to, of course, gifts. While the winners of the election won’t take office until January (meaning policy changes won’t happen until 2027), the midterms can have an immediate impact on consumer confidence and mood, as well as the stock market.
A July survey commissioned by the shopping platform Smarty found that half of Americans are postponing major financial decisions amid economic uncertainty – and the approaching election. In fact, 26% of Americans (just over a quarter of those polled) are delaying travel spending.
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Whether that level of financial restraint lifts after Election Day may depend on how many Americans feel reassured by the midterm results.
Consumer Confidence Is Split
Joel Goldstein, president of Mr. Checkout Distributors, told MoneyLion that, in terms of consumer confidence, “the winning half of the country feels better, and the losing half feels better, and at the register that comes out close to a wash.”
That said, the Republican party currently holds both chambers of Congress. Per the most recent YouGov polling on September 27, 57.2% of Americans view the party’s performance negatively, with only 28% in support of the GOP’s current leadership. Those numbers appear to indicate an electorate whose low consumer confidence would likely be more optimistic should the Democrats take office in one or both chambers of Congress. Current CNBC polling shows 52% of Americans would prefer a Congress controlled by Democrats, while only 43% would prefer Republicans maintain power.
David Kassir, managing director at Manna Wealth Management, said to MoneyLion that Americans are unlikely to cancel Thanksgiving over the midterm results, but they may be more cautious with their overall holiday spending – traveling for only Thanksgiving or Christmas but not both, shopping for fewer gifts or waiting until after January for any major purchases.
A Market Rally Could Happen
Investors could react quickly following the midterms after they reassess economic policy. A rally might lift some portfolios and encourage stockholders to spend. This could have a slight to moderate impact upon the prices of some consumer goods during the holiday shopping season. Goldstein told MoneyLion that investors may feel more generous, even as shoppers focused on everyday costs remain cautious.
The timing of the election (on November 3, with winners not taking office until January), limits just how much a change in Washington, D.C. can reach the upcoming holiday season. Luke Jacobi, founder and editor of OptimistFi, told MoneyLion that while markets can respond immediately to an election outcome, portfolio gains won’t automatically add cash to your household’s checking account.
What May Matter Most: Fuel Costs
For holiday travelers, fuel prices could matter more directly than market variations and consumer confidence. According to AAA gas prices as of October 25, regular gasoline is priced on average at $4.29 across America, compared to the $3.06 average from this time last year.
Jacobi said that oil markets could react quickly to the election outcome, which can reshape airfare costs throughout the holiday season far more quickly than any changes in the congressional map. To that, Goldstein added that what truly dictates holiday spending is not just consumer paychecks, but “the price of gas on the drive to the store.”
If there’s one thing in the midterm election that could change how much you spend on gifts, or how often you travel, it’s fluctuations in the gas market based on who wins, and who loses on November 3.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
