LEILA FADEL, HOST:
We're officially on the other side of the biggest holiday in terms of spending. Shoppers have been expected to drop a record amount of money, even as polling finds Americans are feeling glum about the economy. NPR's retail correspondent, Alina Selyukh, is here to explain. Good morning, Alina.
ALINA SELYUKH, BYLINE: Hello, hello.
FADEL: So what do we know about holiday spending this year?
SELYUKH: So we don't have total numbers. Those will come in January. But all signs seem to point to a surprisingly big year. You know, for how much we've talked about tariffs, with all the delays and changes, they did not disrupt the holiday season as much as feared. We saw Black Friday set a record. Then Cyber Monday set a spending record. Adobe Analytics, which tracks online shopping, saw people spending over $10 million every minute on the evening of Cyber Monday. Mastercard, which tracks spending online and in stores, estimates that spending grew nearly 4% in November and December.
FADEL: Four percent. Well, that's a bit higher than inflation, so it seems like people aren't just spending more because they're paying higher prices.
SELYUKH: No. People seem to be buying more. I'll give you another example. I talked to Alfred Mai. His company, ASM Games, sells card games. Think like family trivia or date night Ideas. And usually, you cannot get him on the phone one week before Christmas. That's the busiest time of year for him. And last week, he was like, yeah, call me now. I'm free.
ALFRED MAI: It honestly blew my mind because we just sold out of the inventory, like, a few days ago. The sales just exceeded all my expectations.
SELYUKH: And I had this question - like, did sales exceed his expectations because his expectations were too low or because people spent with abandon? And he said it's probably both. He had worried about people's tighter budgets when setting estimates. But also, maybe the budgets are tighter.
MAI: It's hard for me to say whether, you know, consumers have this great amount of cash or if it's because they don't have that kind of great amount of cash, where they're just spending it on games.
SELYUKH: Because a $20 game is a cheap way to entertain a whole family. And this split that he's put his finger on is actually the big story now in the economy.
FADEL: So tell us more about this, because I'm trying to square this holiday shopping exuberance with the fact that people regularly tell pollsters they're feeling down on the economy and about their own finances.
SELYUKH: You know, more and more, it's the wealthy that are doing much of the spending. Like, we're seeing more people switch to cheaper stores than what they used to shop before - maybe Walmart or a TJ Maxx or a thrift shop. But we also see luxury brands doing well, like Ralph Lauren. The most stark example I've seen of this was last week on a forecast about auto sales from Cox Automotive. It's a big data firm that owns Kelley Blue Book. And their executive analyst Erin Keating called out this paradox. There are a lot of cars for sale under $40,000 that are just sitting. So it looks like people don't want them - maybe they're not nice enough - but it's actually because their usual buyers cannot afford them.
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ERIN KEATING: This isn't everyone suddenly preferring SUVs. The people who can still afford new vehicles are buying what they want - larger premium vehicles. Everyone else? They didn't downgrade to a compact car. They left the new market entirely.
SELYUKH: And this is starting to happen with more things and to people with higher incomes.
FADEL: So what does this mean for the new year?
SELYUKH: Overall, economists and companies are not too gloomy about next year. So far, it's been the growing wages fueling much of our shopping. And so one big thing to watch in the new year is the job market.
FADEL: That's Alina Selyukh. Thank you so much.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.
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