This Christmas will be one of exorbitant spending and lavish gifts for many American families. It'll also be one of tight budgets and difficulty putting food on the table for many others.
That's the effect of the pandemic recession, which is exacerbating inequalities between the rich and the poor.
High-paid U.S. workers are benefiting from a strong stock market and lower expenses, allowing them to save more money than ever - and spend more on holiday gifts. The less fortunate, meanwhile, are grappling with job losses, eviction and food insecurity. Known as the "K-shaped" recovery, the disparities will be on full display this holiday season.
"The contrast is likely to be very stark," said James Galbraith, a professor of economics at the University of Texas. "For people who have regular salaries, many of us are really quite flush because the expenses that we normally make just in the course of daily living have been reduced, but on the other hand that's cost a lot of people who provide those services their jobs."
Buoyed by financially stable households, total holiday spending is projected to climb this year from 2019, according to a Deloitte analysis. Demand for high-end clothes and pricey jewelry is already rebounding from a slowdown earlier in the pandemic.
That comes even as more than 13 million Americans remain unemployed.
Rachael Valentine, who has two sons under 10, was laid off in March from her job as an assistant teacher for a daycare in Copley, Ohio, and she has yet to be brought back to work. She expects to receive her final two unemployment benefit checks in the coming weeks.
"As far as shopping goes, if I am able to get anything for my two boys it will be very limited," Valentine told Bloomberg. "I'll probably end up asking a woman's shelter I was in years ago for help for gifts for my boys."
Many Americans are finding themselves in a similar position. One in four adults have had trouble paying their bills since the pandemic started, according to a Pew Research Center study this month. A third have dipped into savings or retirement accounts to make ends meet and about one in six have borrowed money from friends or family or received food from a food bank.
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