Holiday Sales Growth Driven by Inflation, Not Volume

During the holiday shopping season, it might seem like everyone is spending a lot of money.

But there's more to the story.

Wealthier people are still spending freely, while middle- and lower-income folks are also spending, even though they're struggling financially.

The reason sales numbers look good is partly because prices are high due to inflation.

This means people are spending more not because they're buying more things, but because each item costs more.

Early signs show that holiday shopping is strong, with spending up compared to last year.

Wages have gone up over the past decade, and people have more money in their accounts than before the pandemic.

This has led to more use of credit and debit cards.

However, the underlying financial stress many Americans feel isn't always visible in these sales numbers.