<p>Record spending during the <a href="http://dailywire.com/topic/christmas" target="_blank" rel="noopener">holiday</a> season coincided with many American households making expenditures using record amounts of debt.</p>
<p>Though a slightly lower proportion of Americans took on holiday debt at the end of last year, the average amount of debt among those who spent beyond their means rose to $1,549, marking a 24% increase from the previous year, according to a <a href="https://www.lendingtree.com/credit-cards/study/holiday-debt/" target="_blank" rel="noopener">survey</a> from LendingTree. The percentage of debtors who expect to take five months or more to pay off their debt rose from 28% to 37%.</p>
<p>“A year ago, this survey showed the first decrease in average holiday debt since tracking began in 2015,” the online lending marketplace said. “However, following a year of rising prices, seven interest rate hikes from the Federal Reserve to drive credit card interest rates to record levels and overall economic uncertainty, a second-straight decrease wasn’t in the cards. Instead, we got the biggest dollar increase in the eight-year history of this report.”</p>
<p>Parents with minor children, those earning between $50,000 and $100,000, and millennials between the ages of 26 and 41 were the most likely to use debt to finance their holiday spending. Although most Americans still financed their holiday consumer debt through credit cards, the portion of households borrowing from friends and family surged.</p>
<p>News of record debt among some shoppers came after a shopping season that appears to have exceeded previous years. Some 196.7 million Americans shopped online and in person during the five days between Thanksgiving and Cyber Monday, according to <a href="https://www.dailywire.com/news/thanksgiving-weekend-holiday-shopping-shatters-expectations-despite-economic-headwinds" target="_blank" rel="noopener">data</a> released by the National Retail Federation, shattering the trade association’s initial projection of 166.3 million shoppers during the first weekend of the season. The organization had previously <a href="https://www.dailywire.com/news/rise-in-holiday-spending-to-be-outpaced-by-inflation-forecast-says" target="_blank" rel="noopener">forecasted</a> that holiday spending would grow between 6% and 8% from the previous year even as inflationary pressures eroded the purchasing power of households.</p>
<p>“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” National Retail Federation CEO Matthew Shay said in a <a href="https://nrf.com/media-center/press-releases/nrf-predicts-healthy-holiday-sales-consumers-navigate-economic" target="_blank" rel="noopener">press release</a>. “In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”</p>
<p>Households have been increasingly reliant upon debt amid elevated price pressures. The total level of consumer loans increased from $1.5 trillion at the beginning of President Joe Biden’s tenure to $1.8 trillion as of two months ago, according to <a href="https://fred.stlouisfed.org/series/CONSUMER" target="_blank" rel="noopener">data</a> from the Federal Reserve. The personal savings rate has dropped from 20% to less than 3% over the same period, according to <a href="https://fred.stlouisfed.org/series/PSAVERT" target="_blank" rel="noopener">data</a> from the Bureau of Economic Analysis, marking a significant decline from rates witnessed before the lockdown-induced recession.</p>
<p>The global economy has experienced lackluster performance since public health mandates ended across the world. Most analysts believe this year will <a href="https://www.dailywire.com/news/big-short-investor-who-foresaw-2008-recession-lays-out-predictions-for-2023" target="_blank" rel="noopener">see a recession</a> in the United States, a reality that would follow one of the <a href="https://www.dailywire.com/news/stocks-had-their-worst-year-since-2008-after-biden-boasted-about-their-performance" target="_blank" rel="noopener">worst stock market</a> performances in modern history last year, while some are more optimistic. Bank of America Chief Investment Strategist Michael Hartnett said in a <a href="https://business.bofa.com/en-us/content/year-ahead-2023/investment-market-outlook-forecasts.html" target="_blank" rel="noopener">report</a> that a recession will strike in the first half of the year before markets attain a “much more solid footing,” while an <a href="https://www.dailywire.com/news/economists-predict-whether-2023-will-see-a-recession" target="_blank" rel="noopener">outlook</a> from Goldman Sachs Chief Economist Jan Hatzius noted that analysts at the company believe the economy will “stick a soft landing.”</p>

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Some Consumers Financed Holiday Spending With Record Amounts Of Debt