What We Spent Money On in 2022
If the economic pessimists in the spring and summer had been right, America currently would be frozen in the clutches of a deep and punishing recession heading into 2023. But the December Labor Department report showed continued economic strength as wages and payrolls crushed expectations yet again. More people are working, they’re earning more money and unemployment remains near record lows.
This news came on the heels of record Thanksgiving and online Black Friday spending just a few days earlier.
Despite a year defined by the highest inflation in decades, looking back, it appears now that Americans sensed all along that a recession wasn’t unavoidable and they could just go right on spending.
Americans Shopped Smarter for Needs at the Expense of Wants
Inflation peaked above 9% in June, the same month that gas prices topped out over $5. Even so, the July retail sales report showed that Americans ignored the doomsday recession headlines and kept on buying. They just changed what they bought.
According to CNN, spending remained consistent, but people directed their dollars down to concentrate on necessities. For example, they bought fewer steaks and more affordable tuna, hot dogs and chicken.
Consumers proved savvy planners and managers of their own money. Despite the fact that they still had $2.2 trillion worth of stimulus funds in their collective bank accounts, they put off the purchases of couches, dishwashers and even pajama sets — which they had been gobbling up in quantity in the pandemic’s early days — all without any significant change in month-to-month retail spending at the height of the inflation crisis.
The Country Spent More on Impulse Purchases
Although families shifted to a needs-based spending mindset when prices rose the fastest, prudence didn’t always rule the day. In the spring, an annual survey from the shopping platform Slickdeals showed that 64% of adults had spent more on impulse purchases than in the year prior.
The average person spent $314 per month on unplanned purchases this year, up from $276 in 2021. Interestingly, when the study was conducted in April, the average respondent was willing to spend up to $310 on a single unplanned purchase — up from $277 the year before.
But look at the context.
The year-over-year inflation rate in April was 8.3% — and 8.3% of $310 is roughly $26. That makes last year’s $277 purchase closer to $303 today — just $7 away from 2022’s $310 threshold.
It’s not that Americans were willing to spend more money on impulse purchases in 2022. It’s that they had to spend more to get the same amount of things that they hadn’t planned on buying.
Revelers Dug Deep for Special Events and Minor Holidays
Reports from the National Retail Federation (NRF) offered more evidence that Americans mostly ignored dire recession warnings in 2022. They felt secure enough to spend big on partying and gift-giving on the calendar’s most exciting and anticipated special days.
- Super Bowl: Individual spending rose from $74.75 in 2021 to $78.92 in 2022. Total spending jumped from $13.9 billion to $14.6 billion.
- Valentine’s Day: Per-person spending rose from $164.76 to $175.41 and total spending leaped from $21.8 billion to $23.9 billion.
- St. Patrick’s Day: Per-person spending jumped from $40.77 to $42.33. Total spending increased from $5.14 billion to $5.87 billion.
- Mother’s Day: Individual spending rose from $220.48 to $245.76 and total spending rose from $28.9 billion to $31.7 billion.
- July 4th: Per-person spending jumped from $80.54 to $84.12 and total spending increased from $7.52 billion to $7.7 billion.
- Halloween: The NRF didn’t track individual averages, but total Halloween spending broke last year’s record of $10.1 billion with a new record of $10.6 billion.
- Back-to-school/college: Back-to-school spending jumped from $849 to $864 per person and back-to-college spending remained nearly identical, with a slight dip from $1,200 to $1,199.
There were only two minor holidays that saw consumers cut back. The average person spent $169.79 on Easter in 2022, down from $179.70 in 2021. Total spending fell from $21.6 billion to $20.8 billion.
Also, dads got stiffed — but only a little compared to last year’s record high — with Father’s Day spending falling from $174.10 to $171.79 per person and from $20.1 billion to $20 billion in total.
People Splurged on Travel and Experiences
Consumers spent much less on vehicles of all kinds in 2022, including cars, light trucks, motorcycles, boats, aircraft and RVs — but that doesn’t mean they stayed home.
Bureau of Economic Analysis data shows that the country defied 40-year-high inflation rates and spent heavily on travel and experiences.
In the first half of the year, foreign travel by U.S. residents increased by 89% over the same period the prior year — the highest of any travel category. Air transportation spending jumped by 42%, water transportation jumped by 19%, hotel and motel spending rose by 20% and ground transportation spending jumped by 14%.
Finally, travelers and revelers spent 12.4% more on package tours and 21% more on admissions to spectator amusement events.
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