The news: US consumers are spending big on Halloween, with more than half (54%) of shoppers planning to spend $200 or more, despite 63% of respondents claiming they felt more price-sensitive about Halloween costs than last year, per a CIT Bank survey conducted by Researchscape International.

• 38% of Americans plan to spend $300 or more.
• While the average budget was $210 nationally, millennials’ average budget hit $270 and Gen Zers averaged $308.

Why this matters: One might not expect this kind of spending on a minor holiday given how people feel about the economy.

• The index of consumer sentiment declined 7% MoM and 12.7% YoY, per the University of Michigan’s Survey of Consumers. 
• Michigan’s current economic conditions index fell 1.9% MoM and 15.7% YoY.
• And future economic expectations plummeted 10.1% MoM and 10.4% YoY.

And yet, spending is up. Total card spending per household rose 0.9% MoM and 4.5% YoY in August, per The Bank of America Institute. Discretionary spending accounted for the bulk of this growth.

Implication for issuers: Consumers are in a dour mood about the economy, but that’s not dampening their holiday cheer. Issuers can benefit from shoppers’ searches for everyday joy by targeting rewards categories that encourage younger consumers’ “little treat” impulses and holiday splurges. 

Issuers can offer boosted cash back at seasonally appropriate retailers for decorations or costumes; For example, Amex cardholders can get $15 dollars back on purchases of $75 or more at Spirit Halloween.

Issuers could also offer rotating rewards categories that target the holiday season or let consumers select specific merchant bundles where they can earn extra rewards, similar to Venmo Stash.

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