As the year embarks on October, the holiday shopping season is fast approaching. Mastercard Economics Institute Chief Economist Michelle Meyer joins Wealth! to share her insights on expected consumer spending trends for the upcoming period.

Meyer says Mastercard, using its SpendingPulse data, expects a 3.2% year-over-year growth in overall retail spending during the holiday season, which she defines as November 1st to December 24th. However, she notes that for many consumers, this season often begins earlier.

A standout in Meyer's forecast is the electronics sector. She predicts a 6.5% increase in spending on electronics during the holiday period, attributing this growth to the current replacement cycle and deflation in prices for these items. As consumers continue to seek value, Meyer anticipates that companies will lean heavily into promotions this holiday season. This strategy is expected to result in "demand-led declines in prices."

"In our view, we're setting up for what should be a pretty reasonable season here for the consumer," Meyer states.

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This post was written by Angel Smith