While retail forecasts predict trillion-dollar holiday sales, American consumers, and especially Black families facing 8.3 percent unemployment, have slashed holiday budgets by $229 in just one month as economic confidence crashes to the lowest level since July 2024, amid concerns over Holiday Spending.
The dramatic drop revealed in a Gallup poll released Dec. 4 shows Americans planned to spend $1,000 on holiday gifts, food and decorations in October. By November, that number had plummeted to $778—exposing a widening chasm between Wall Street’s optimism and Main Street’s reality.
The focus on Holiday Spending has become critical as families navigate financial challenges.
For Black families, the squeeze is tighter. Black unemployment stands at 8.3 percent, more than double the 4.6 percent national average. In Chicago neighborhoods like Riverdale, unemployment hits 29.9 percent. In Englewood, it’s 24.9 percent and in West Garfield Park, about 23.8 percent of residents are not working.
“The economy has continued to show surprising resilience,” said National Retail Federation Chief Economist Mark Mathews in predicting holiday sales will surpass $1 trillion for the first time. But Gallup’s survey of 1,321 Americans tells a different story.
The Economic Confidence Index fell seven points to negative 30 in November—the lowest since negative 35 in July 2024. Only 33 percent of Americans say it’s a “good time to find a quality job,” marking the most negative outlook since January 2021 during the pandemic.
“I’m not spending like I did last year,” said David Maddox, a father of five who works inside McCormick Place. “Everything has gone up—food, gas, you name it. I want to do things for my kids, but now is the time to be saving what you got, not spending it on a bunch of toys.”
Maddox, who lives in South Shore, is not alone. Of the 10 people the Crusader asked about their holiday shopping plans, nine indicated they would cut back on gifts. The tenth, who asked not to be named, said, “It’s Christmas and so we go all out,” the woman who lives in Woodlawn said. “I feel like if you can’t turn up this time of the year, what (are) you doing?
“I saved up, but I’m getting most of my stuff online and my kids will get some of their toys from the Dollar Store, or I’ll go to Walmart to get sales,” the mother of three said. “I’ll probably shop at Rainbow for their clothes. If I can’t afford it, I won’t get it.”
The fact that families are willing to spend, despite economic uncertainty, is surely good news for retailers. The divide between corporate forecasts and household budgets reflects what economists call a K-shaped economy. The top 10 percent of earners accounted for nearly half of all consumer spending in the second quarter, according to Moody’s Analytics. Meanwhile, the bottom 80 percent of households—those earning less than $175,000—have “simply kept pace with inflation since the pandemic,” said Chief Economist Mark Zandi.
Despite $2.1 trillion in annual consumer spending, African American households hold a median wealth of just $44,900 compared to $285,000 for white households. In Chicago, Black households hold approximately $24,000 in liquid assets versus $180,000 for white households and have zero wealth, according to a report earlier this year from the Chicago Urban League.
Nielsen data shows roughly 80 percent of Black consumer spending goes toward necessities: rent, food, transportation, and healthcare. Holiday spending represents a larger share of disposable income, making economic shocks devastating.
THE SHUTDOWN FACTOR
Gallup’s November survey encompassed the final stretch of the nation’s longest federal government shutdown, compounded by stock market volatility and labor market uncertainty. The National Retail Federation acknowledged the shutdown as “a notable headwind” with timing “particularly challenging just before the holiday season.”
For Black federal workers who comprise a disproportionate share of government employees, the impact compounds existing vunerabilities. In November, government SNAP disruptions forced Chicago food pantries to report a 38 percent surge in visits. Local churches and community-based organizations sprang into action by serving meals, distributing groceries and fresh produce. Greater Chicago Food Depository estimates food insecurity is 37 percent higher for Black households versus pre-pandemic levels.
In addition, the spending crisis cannot be separated from the 2022 expiration of the expanded Child Tax Credit, which lifted 3.7 million children out of poverty before Congress allowed it to lapse.
When the credit expired, 45 percent of Black children lost the full credit compared to 42 percent of Hispanic children and 23 percent of white children. Child poverty nearly doubled from 5.2 percent in 2021 to 12.4 percent in 2022.
To add insult to injury, Black young adults in Chicago face catastrophic jobless rates. Nearly 50 percent of African American 20- to 24-year-olds are unemployed compared to 19.5 percent of white young adults. For Black teenagers ages 16 to 19, the disconnection rate—neither in school nor working—stands at 14.3 percent versus 3.1 percent for white teens.
West Garfield Park exemplifies the crisis: 80 percent of young adults ages 17 to 34 cannot find work. A 2021 study, “Survival Economies,” by Equity and Transformation (EAT), a nonprofit advocacy organization, found 29 percent of residents have never had a regular paycheck job, and 48 percent say traditional employment is “simply unavailable” in their neighborhood.
Across the state line, Gary, Indiana, represents the extreme endpoint of structural abandonment. Once a thriving steel city of 178,000 residents in 1960, Gary’s population has collapsed to 67,199, which represents a 62 percent decline.
Economic indicators read like a disaster movie. Some 32.19 percent of Gary residents live below the poverty line, versus 11.5 percent nationally. The Median household income sits at $34,000, which is half of Chicago’s $69,000. Workers need $24.12 per hour to afford a two-bedroom apartment, but the median income suggests most cannot afford basic housing.
Eighty percent of Gary’s residents are Black. Despite Gary Mayor Eddie Melton’s aggressive push to usher in economic development and create jobs, environmental contamination, failing infrastructure and a collapsed tax base leave residents in what scholars call “economic sacrifice zones.”
While Gallup shows consumer anxiety, other forecasts reflect conflicting data. A Deloitte survey found consumers expect to spend $1,595 this year, down 10 percent from 2024. Seventy-seven percent anticipate higher prices. Fifty-seven percent expect the economy to weaken—the most negative outlook since Deloitte began tracking in 1997.
PricewaterhouseCoopers found 84 percent of consumers expect to cut back over the next six months. Yet actual Black Friday spending hit $11.8 billion online, up 9.1 percent from 2024, according to Adobe Analytics. Visa Business and Economic Insights projects 4.6 percent nominal growth but only 2.2 percent real spending after inflation. In practical terms, Americans spend more dollars but buy fewer items.
According to national indicators, Generation Z shoppers plan to spend 34 percent less than last year. Baby boomers—buoyed by stock market gains—plan to increase spending 21 percent to approximately $855. Perceived anti-Black didn’t help. Major retailers, including Walmart, Target and Amazon, rolled back diversity, equity, and inclusion commitments in late 2024 while continuing to market heavily in Black communities.
Walmart eliminated DEI positions while maintaining stores in Black neighborhoods with few alternatives. Amazon scaled back diversity initiatives despite facing discrimination lawsuits. Target pulled Pride merchandise and DEI programs while operating stores on Chicago’s South Side.
Although national advocates and social media personalities would have you believe otherwise, sustained consumer boycotts remain limited. African American neighborhoods often lack Black-owned alternatives for groceries and necessities, forcing continued spending at corporations that abandoned community investment.
Chicago’s highest-unemployment neighborhoods are represented by aldermen facing difficult questions: What job creation initiatives exist for neighborhoods with 20 percent-plus unemployment? How much aldermanic menu funding goes to workforce development versus decorative improvements? What tangible unemployment reduction results can be demonstrated?
Sixth Ward Ald. William Hall’s April 2025 “Spend in the Black” event at 75th Street and King Drive demonstrated engagement. But the scale needed dwarfs what one alderman can accomplish—it requires coordinated city, county, state and federal investment.
The question facing retailers and economists: Will consumer attitudes rebound now that the government shutdown has ended, or does November data reveal deeper economic pessimism?
“Retailers may hope that with the shutdown over, consumer attitudes and enthusiasm will rebound,” Gallup analyst Lydia Saad wrote. “But it could be enough to prevent the 2025 holiday season from turning out like 2008″—a reference to the Great Recession when Black unemployment hit 12.7 percent.
For Black families navigating double-digit unemployment, lost Child Tax Credit benefits and food insecurity affecting one in three households with children, the question remains whether 2025’s holiday season will prove a temporary setback or a harbinger of deeper structural decline.
“The U.S. consumer remains resilient. Spending continues to drive GDP growth, and has helped prevent a recession in 2025,” said Thomas LaSalvia, head of commercial real estate economics at Moody’s Analytics. “Unfortunately, the situation is fragile, because nearly all of the increase in inflation-adjusted spending growth is concentrated in the top 20 percent of income earners….”
Stephanie Gadlin is an award-winning, independent investigative journalist whose work blends historical analysis, data reporting, and cultural commentary. Her work is published in the Crusader and other publications across the country. She specializes in uncovering the intersections of Black culture, public health, environmental justice, systemic racism, public policy and economic inequality in the U.S. and across the African Diaspora. For confidential tips, please contact: [email protected]
