Darker outlook on economy and spending heading into the holidays

Partisan sentiment tempered by election and pandemic

The holiday season is poised to be a more constrained affair in 2020 as Americans plan to pull back spending or adjust their shopping habits due to COVID-19. They also show greater signs of worry about the traditional activities and celebrations that come along with the advent of winter.

As the CDC implores Americans to suspend any Thanksgiving plans with people outside their immediate household, a growing number of Americans see socializing indoors, frequenting restaurants and travel as a “large or moderate risk.” This high level of concern is primarily driven by Democrats, but the Axios-Coronavirus Index shows that with new coronavirus cases surging across the country, Republicans are increasingly more worried about these traditional holiday activities too.

The pandemic is also changing how Americans plan to shop this year, encouraging many to move online. More than a third of Americans are not comfortable with the prospect of in-store holiday shopping, given the possible health risks. Case in point, nearly 40% are planning to shop on Cyber Monday, as opposed to the 25% who plan to shop in-stores on Black Friday, according to the Ipsos consumer COVID tracker.

Those who do avail themselves of the deals on both days might be splashing out less than usual. With the holidays upon us, nearly half of Americans say they plan to spend less this holiday season than last year, according to the Forbes Advisor-Ipsos U.S. Consumer Confidence Weekly Tracker. Even higher income Americans are planning to pull back their holiday spending this year.

Record unemployment and the absence of a second stimulus plan are major factors in depressed consumer sentiment heading into the holiday season. New lockdown orders and business restrictions only add to the uncertainty as there is the possibility that these could precipitate a new wave of job losses.

But these are not the only issues affecting Americans’ views on holiday spending and broader economic concerns at the moment. The ongoing pandemic and recent presidential election are also influencing how optimistic Americans are about their economic prospects, current and future, though how they feel about either issue has a lot to do with the party affiliation.

The election could have a particularly profound effect on how Democrats and Republicans view their economic prospects going forward. In recent election cycles, consumer sentiment has typically tracked with whichever party is in office. 2016 is a particularly stark example of this dynamic, when consumer expectations among Republicans and Democrats saw a dramatic shift in the period following Trump’s win. According to University of Michigan analysis, consumer expectations fell 24.1 points among Democrats and rose 50.5 points among Republicans from June to December 2016.

While we are still just a few weeks out from an election that has not formally been called in Joe Biden’s favor, a similar pattern appears poised to play out. Consumer confidence is now on par across parties as Republican sentiment collapses and Democrats show new, albeit still muted, signs of optimism. The sharp decline in Republican consumer confidence comes even as a majority of Republicans say Biden’s win was the result of the election being rigged.

Only time will tell how long this heightened sense of risk will last and how that might translate to changes in consumer behavior. Multiple versions of a COVID vaccine are in development, which could lead to yet another seismic shift in how live as we begin to reengage with the world. But, whether it is the virus, the election, the economy — or some combination of the three — that have the nation most worried, it is clear that Americans on both sides of the aisle are planning for a holiday season unlike any other.

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Catherine Morris

Catherine Morris

Data journalist @Ipsos covering trends in public opinion around society, COVID and politics.