Soon, millions of Americans will celebrate Thanksgiving, gathering around the table with their loved ones and turkey in hand. A month later, they will ring in the Christmas festivities and turn their calendars to 2020.
But it’s not too early to assess the state of America’s consumer economy, as it pertains to end-of-year holiday spending. And the early signs are promising: Turkey Day 2019 is projected to be the most expensive in U.S. history, as the typical American plans to spend more than $186 on the Thanksgiving meal—up from $165.14 in 2017. This doesn’t account for air travel, with Thanksgiving air travelers preparing to spend an average of $822 to reach their holiday destinations.
Then there’s Christmas. According to Gallup, U.S. consumers anticipate spending an average of $942 on Christmas gifts this year—up from $885 at the same time in 2018. In fact, this year’s holiday estimate is Gallup’s highest in history.
Dig deeper, and many shoppers plan to fork over four-figure sums for the holidays. Thirty-seven percent of Americans say they will spend $1,000 or more on gifts, while 21 percent will spend between $500 and $999. Another 27 percent of Americans will dish out between $100 and $499.
So what do all of these projections mean? For starters, it’s shaping up to be a lucrative fourth quarter for U.S. retailers. The same goes for online merchants, who showcase their offerings on company websites and platforms like Amazon.
But, more importantly, the 2019 holiday forecast serves as a valuable reminder that ours is a consumer-powered economy. American consumers—and our willingness to spend on a variety of goods and services—are the primary drivers of our economic prosperity. The mutually beneficial relationship between sellers and buyers is not only the defining characteristic of America’s free-market economy, but also the primary factor behind its long-term potential to adapt and grow. These relationships, which feature new producers and old staples, have allowed the United States to retain its claim to the world’s largest economy.
The numbers bear it out. As of October, U.S. gross domestic product (GDP)—the total market value of the finished goods and services produced within our borders—hovers around $21.5 trillion. (The Chinese economy, with the world’s second largest GDP, checks in below $14 trillion.) Of that $21.5 trillion, personal consumption expenditures account for a whopping 68 percent.
The “one percent” may garner the headlines (for better or worse), but that 68 percent—the collective preferences and purchases of consumers like me and you—is what allows people to use their talents in a way that is valuable to others. It’s what makes America, America.
There is unparalleled beauty in that fact. In a sense, we all have a vital role to play in the economic fortunes of the America we know and love. It is not the federal government that has made the U.S. economy the global standard, nor does it make our economic prosperity sustainable today. Our political leaders, however important, are not the catalysts of entrepreneurial creativity, small business expansion, or the holiday spending upon us now. They may help or hinder economic activity, but they are not its creators—they never will be.
No government program—whether billions or trillions of dollars are spent propagating it—can come close to matching the millions and millions of American consumers and producers in the marketplace. As French political theorist Alexis de Tocqueville wrote in Democracy in America, “The health of a democratic society may be measured by the quality of functions performed by private citizens.” He identified the collective power of individual Americans in the early 1830s, and that endures today.
It endures especially this holiday season—with its unprecedented expenditures to come. Never forget: What makes America, America, is people like you. Onwards and upwards!