Eric Croak expects plenty of "value-hunting" and cautious spending this upcoming holiday shopping season as middle- and lower-income consumers continue to navigate post-pandemic inflation and the potential for higher prices from President Donald Trump's tariffs.

"I'm expecting a very practical, value-hunting holiday. People will still show up for the season, but they are comparing more, timing purchases around promos, and trading down on extras," said Croak, president of Croak Capital, an Ohio-based financial advisory firm.

"The mood is cautious, everyday prices still feel high," he said.

This year's Christmas holiday shopping season is more than on the horizon. For some stores, online retailers and consumers, it's already here.

Post-pandemic inflation, Trump's on-and-off tariffs regime and record U.S. household debt of $18.39 trillion confront holiday shoppers and travelers as they chart their plans for Christmas and other upcoming holidays.

'STRANGE PLACE'There are also distinct contrasts between wealthy households, who have benefitted from rising and record high stock markets and real estate investments since the pandemic, and working-class and lower-earning households strained by high housing and food costs over the past five years.

"We are kind of in a strange place," said Tom Arnold, an economist and business professor at the University of Richmond.

"Consumer sentiment is not high. Most of that spending is from higher-income consumers,'" Arnold said.

The richest 10% of Americans account for a record 49.2% of consumer spending in the second quarter of 2025, according to analysis of Federal Reserve Data in June by Bloomberg, Moody's Analytics and research firm AMP.

'It's a mixed picture," said Rebecca Homkes, a lecturer at London Business School and a professor at Duke University Corporate Executive Education program.

Homkes said that spending by the wealthiest has "never been stronger."

Jacqueline Mondelli, chief marketing officer for Florida-based Squaremouth Inc. (a travel insurance firm), agrees.

Mondelli said higher-income consumers and travelers have been "really unaffected" by economic or financial turbulence. She noted an upswing in interest in high-end travel, including to Antarctica (where the average trip costs $18,000).

'ESCAPE FROM REALITY'Michael Barbera, a consumer psychologist and professor at the University of North Carolina Pembroke, notes the contemporary resilience of American consumer spending.

"I'm cautiously optimistic," he said.

But he also sees headwinds.

Overall, U.S. prices are up 26% since January 2020 and before the COVID-19 pandemic.

"Consumers are spending more and in many cases getting less," Barbera said.

"Many Americans are living paycheck to paycheck," he said, especially of working-class and lower-income households.

An annual national survey by PNC Bank shows 67% of American workers say they are "living paycheck to paycheck." That's up from 63% last year.

Barbera and others said U.S. consumers and travelers are prioritizing gifts and trips that offer experiences.

"It's an escape from reality," Barbera said of gifts and travel that promote and promise experiences rather than just a financial transaction.

Holiday spending came in at a record $994.1 billion last year, according to the U.S. Census Bureau.

"It looks like consumers are going to spend about what they did last year," Homkes said.

But she also notes the effects of higher prices continue to dog consumers.

"Their spending is the same, but with inflation, they are actually getting less," she said, echoing Barbera.

A survey of 8,000 U.S. consumers by online retail platform Shopkick by Trax shows 54% of Americans say they are changing holiday spending plans due to price hikes, with 35% of that group planning on spending less this Christmas season.

The same survey found that 83% of shoppers say they have already seen or expect higher prices for gifts.

Arnold said lower-income households have already been "tightening their belts," noting consumer shifts to lower-priced grocers and retailers such as T.J. Maxx, Aldi and Walmart.

"THE NEW GRINCH?"Trump's tariffs could also have impacts on holiday prices and supply chains, though the levies have not markedly hiked prices so far for shoppers.

"Tariffs will be the new Grinch that stole Christmas. Brace yourself for higher holiday prices as tariffs push up import costs. Expect to pay more for toys, electronics, and decorations this season," said Karla Dennis, founder and CEO of Karla Dennis & Associates, a California-based financial and accounting firm.

Dennis sees some consumers swapping brands they buy and where they shop for more frugal deals. She also encourages more early purchases.

"Don't wait for deep discounts: With tariffs squeezing retailers and disrupting supply chains, the huge holiday sales may never come," Dennis said.

Croak also sees more early holiday sales, but said price hikes may be tempered.

"Tariffs add some pressure in categories like appliances and electronics, but strong competition and calmer logistics than the pandemic years should keep price spikes in check," he said.

Homkes said inflation weary customers may be more likely to put off larger purchases than significantly slice holiday spending. She also expects to see brands and retail chains try to offer some deals and eat at least some of the potential increased costs from tariffs.

Otherwise, they risk losing customers and sales to more reasonably priced rivals and alternatives.

Arnold and Homkes both said manufacturers and retailers have been eating some of the costs of tariffs, especially with their uncertain nature via Trump's trade negotiations and challenges to their legality.

But as some of the trade duties remain more permanent under deals negotiated by Trump, more of those costs will show up at checkout stands

"Consumers will still feel something," Homkes said.