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Despite high inflation and fears of an economic recession, the Christmas and New Year holiday shopping season looks to be off to a flying start this year.

 Retailers reported solid sales during Black Friday in late November and the biggest online shopping event known as Cyber ​​Monday, as many US consumers appeared to be attracted by the steep discounts.

Is a post-holiday financial hangover setting in?

We spent BGN 310 million during Black Friday

Americans spend like last minute

Although growth in US consumer spending is likely slowing, it remains surprisingly resilient.

The problem, however, is that many Americans' wages are not increasing in line with inflation, CNN notes.

This forces some consumers, if they want to indulge in real holiday shopping, to tap into their savings or increase their credit card debt, which charges high interest rates. 

Not only can this be an unwise decision, but it is also likely to force some consumers to cut back on their spending in the months after the Christmas and New Year holidays to pay off their debts or restore their savings.

A possible reduction in consumption could prove problematic for the country's economy, which is highly dependent on consumer spending.

"There's going to be a post-holiday financial hangover from spending, (which many people are doing - ed.). It's inevitable and it's going to be particularly tough this time," noted Joe Brusuelas, chief economist at consultancy RSM.

"For the first time, the American middle class will really bend under the pressure of high prices," adds the analyst.

Savings are quickly dwindling

"Savings are rapidly declining," wrote Moody's analysts in a memo to their clients.

Americans' accumulated savings had shrunk by the middle of this year to about $1.7 trillion, according to estimates by the US Federal Reserve. 

By the end of September, these savings had fallen even more - to about 1.5 trillion dollars, according to the experts of the RSM company.

"That trillion and a half dollars will be exhausted sometime in the middle of next year," JP Morgan president and CEO Jamie Dimon told CBS recently.

He hinted that inflation was "eating up" a huge amount of personal savings in the country. 

Dimon noted that their reduction "is one of the things that can collapse the economy and cause a mild or severe recession that people fear."

Brian Wenzel, chief financial officer of in-store credit card company Synchrony Financial, said the cost of living is clearly having an impact on some borrowers.

"What we're hearing today (from customers - ed.) is, 'Hey, listen, I can't pay my rent, they raised it.

Inflation is killing me when I'm paying for gas and groceries," Wenzel said at a conference earlier this month organized by US investment bank Goldman Sachs.

Against this backdrop, credit card interest rates are reaching record highs as the US Federal Reserve tries to fight inflation by massively raising interest rates.

They exceeded 30 percent on some types of credit cards, CNN noted.

It's not the best time for Americans to rely on their savings and credit cards to indulge in holiday shopping, analysts say. 

"Unfortunately, however, they are exhausting their savings on the eve of next year, when at best there will be a slowdown in economic growth, and at worst - a recession," commented Joe Bruceuelas of the consulting company RSM.

Decline in UK retail sales 

UK retailers are suffering losses due to a sharp drop in customer numbers during the key period for their Christmas sales, research firm Springboard announced last Friday.

Visits to UK stores fell by 3.8 per cent year-on-year, the retail industry analysis firm added. 

UK retail sales unexpectedly fell in November despite the World Cup in Qatar and Black Friday sales.

The figures reflect the stress many UK households are under as the cost-of-living crisis hits their finances, Reuters notes. 

November retail sales fell by 0.4 percent in November from October, another sign that the British economy may be in recession.

They are 1.5 percent below the pre-pandemic 2019 levels.

"We expect high inflation to further reduce real household disposable income. We forecast it to fall by 1.1 per cent in the fourth quarter of 2022, which will continue to limit sales in December," Olivia notes. Cross, economist at Capital Economics consulting company.