Related Articles
In Westport, Conn., a 35-year-old who works for an investment firm is holding off on making any financial investments until after the election. Across the country, in Kenosha, Wis., a man who works in sales said he would love to buy a house and get out of his rental, but with Election Day less than a month away, he can’t possibly make such a colossal decision.
Call it the election shopping slump.
The looming presidential election — with Vice President Kamala Harris and former President Donald J. Trump locked in a dead heat in the polls — has injected one variable too many into an already confusing time for the economy, with inflation, high interest rates and a surprisingly strong job market. The country is on edge, and consumers on both sides of the political aisle are reluctant to make big-ticket purchases. They are holding their pocketbooks close.
Some home buyers are waiting to see if a Harris administration will deliver down-payment assistance for first-time buyers, a campaign promise. Others are hopeful a Trump victory will spell lower taxes. Still others just want it all to be over already.
The American pastime of spending money on stuff — a honeymoon in paradise, that new car smell, a kitchen renovation, impulsive online shopping — is currently on pause for some. There are engaged couples so preoccupied with the current state of affairs that they can’t commit to wedding venues for 2025, and some who, a year ago, anticipating that a political pall could color their big day, steered clear of October and November dates. Car dealers and real estate agents say buyers are waiting out the election to see if interest rates or prices fall in the aftermath. Online retailers have been bracing for the election jitters since the summer.
“They’re frozen,” Antonio del Rosario, a New York City real estate broker, said of home buyers and sellers. Election-related angst sets in around this time every four years, he said, with buyers and sellers wondering if a new administration will mean a change in tax policy, the economy or the overall direction of the country. This year, clients seem especially confused about what’s to come. “There is a deer-in-the-headlights attitude,” Mr. del Rosario added.
Consumers do not like uncertainty. When people feel they’re on unstable ground, they retreat and hoard resources. In the modern era, those resources are usually cash. “It’s not like people don’t know they’re going to need a house, they’re going to need a car,” said Kelly Goldsmith, a marketing professor and behavioral scientist at Vanderbilt University who studies the psychology of uncertainty and scarcity. But, she added, “if the world starts to fall apart, you benefit from having a bunch of money in your mattress, right?”
Tom Handyside, 35, who rents a two-bedroom apartment in Kenosha and supports Mr. Trump, said he can’t enter the housing market until he knows who will be in office in January. “I don’t want to do something now and in six months it’s going to be a better situation,” he said. “One hundred percent, nobody knows what’s going on.”
Retailers have also voiced concerns about consumer unease. On an August call with reporters, Amazon’s chief financial officer, Brian T. Olsavsky, said it was more difficult than usual to predict consumer behavior because “there’s a lot of events that are occupying people’s attention right now, from political conventions to the election itself.”
The television shopping networks QVC and HSN see the effects in real time, as viewership waxes and wanes with the news cycle, according to David Rawlinson II, the chief executive of Qurate Retail, which owns the channels. “We rely on people watching our content,” he said, and when the news takes a dramatic turn, “they’re probably not watching QVC.”
The ‘Pivot Point’
While this year’s election might feel exceptionally fraught, with the economy and housing costs top of mind for many voters, there have been plenty of nail-biters over the past 25 years, including Bush versus Gore and Clinton versus Trump. “Every four years this happens,” said Jerry Reynolds, a former car dealer and the host of the CarPro radio show. “It’s the uncertainty.”
Whether the changes in people’s spending habits will affect macroeconomic data, such as U.S. retail sales or corporate earnings, remains unclear. (So far, they haven’t seemed to affect U.S. retail sales, which have continued to grow.) The impact might ultimately be more like a blip, with any reluctant consumers opening up their wallets later in November, once they know what the political future holds. But it is clear that the election is weighing on consumer sentiment and the spending outlook right as the retail industry enters its most important time of year: the holiday season.
Nearly three-quarters of respondents to a survey published in June by Cox Automotive said they expected the election result to affect the economy, with 60 percent saying it would affect their next vehicle purchase and 78 percent saying it would influence other big-ticket purchases.
Mr. Reynolds predicted that auto sales would bounce back: “We’ll likely see a surge of sales right after the election.”
The same recovery has historically occurred with other purchases. An analysis of 20 years of housing sales data in Los Angeles, Manhattan and Miami found that sales dipped in the second half of even years and rebounded in odd years, in the 12 months ending in November of each year. In even years, sales were down year over year by 5.5 percent in Los Angeles, 2.5 percent in Manhattan and 2.6 percent in Miami. In odd years, sales were up by 4.6 percent in Los Angeles, 8.5 percent in Manhattan and 10.2 percent in Miami. The pattern was not restricted to historically Democratic strongholds, either, as it held in Suffolk County, N.Y., which typically votes Republican, with sales down 0.8 percent on election years and up by 0.8 percent on off years.
“Election Day is the pivot point,” said Jonathan J. Miller, a real estate appraiser who analyzed the data. “After the election, there is an uptick in sales.”
“Think of this as a regulator,” he added. “It’s like the foot is taken off the brake the day after the election.”
Still Buying $8 Cups of Coffee
Certainly, Americans still shop during election season. And retailers hope shoppers will see their stores as a welcome destination for escapism and self-care. Credit card and debit card transactions didn’t fall in the months leading up to the 2016, 2018 and 2022 elections, according to Consumer Edge, a company that tracks consumer data. (It omitted 2020 from its analysis because of the volatility of the pandemic.) The company did find, however, that bookings for cruises and purchases from luxury merchants moderated in the months before the 2016 election.
In the past few months, Consumer Edge has seen a slowdown in credit card and debit card spending compared with earlier this year, particularly in spending on airlines, cruises and event tickets. “Consumers might be holding off on those pricey, mostly discretionary purchases amid uncertainty ahead of the election,” said Michael Gunther, the company’s head of insights.
Dr. Goldsmith said consumers often make more discretionary purchases on less costly items in stressful times, in an attempt to regain control, or at least the illusion of it. “When I see myself holding this $8 Starbucks cup, I feel like I’m a person able to do things in the universe,” she said.
Will Richardson, 35, of Westport, who is the head of marketing and operations for an investment firm, sees his mid-30s as a time to start making big financial decisions. But the vibes seem wrong right now. While he declined to say whom he was supporting in this election, he said his hesitancy was less about the candidate and more about the unknown. “There is definitely a time and place to take big swings,” he said. “But right now, it needs to be a pretty perfect fastball right down the middle.”
It’s a sentiment that Emily Luk, the chief executive of Plenty, an online wealth platform, hears on client webinars and onboarding calls. Lately, clients have been reluctant to tie up their cash in investments, fearing a potential economic downturn. Ms. Luk finds the widespread angst surprising. In most election cycles, she said, “there usually is one party that is more optimistic,” but this cycle, “we’re seeing a lot more pessimism on both sides.”
Still ‘Freaking Out’
Every election cycle, Alyssa Pettinato, the owner of Alinato Events in Manhattan, notices a dip in the wedding business. But this year, “everyone has been freaking out,” she said, referring to vendors whose 2025 calendars are still not booked. Ms. Pettinato attributes some of the lag to inflation, but she said couples are also too distracted to plan parties. “All the people who are engaged think they have endless time and they’re all waiting for us to get through the fall,” she said. “They’re waiting to see how things shake out.”
Susan Cordogan, who owns Big City Bride in Chicago, started noticing the trend a year ago, when many of her clients conspicuously avoided picking dates in what is usually prime Chicago wedding season — October into early November. (It didn’t help that the Democratic National Convention was held in Chicago over the summer, turning the city into a political destination.)
Some couples worried that political unrest could upend travel or shut down city streets. One bride, who first contacted Ms. Cordogan last January to talk about dates, agreed to one in early September — a short turnaround to plan a wedding, just to avoid cutting it too close to the election.
The biggest concern from Ms. Cordogan’s clients was that friends and family of opposing political stripes would trade barbs, ruining the day.
“It’s like looking at a storm system coming in,” she said, “and wondering how bad it will be.”
<
