Call it a love-induced splurge, but Americans are projected to spend $27.4 billion this Valentine’s Day season, an all-time high, according to the National Retail Federation.
The unusually large increase in average spending appears to be due to strong consumer finances and a trend of consumers buying more gifts, cards, candy, and flowers for friends, family, co-workers, and pets, according to the group’s survey.
“Valentine’s Day is a sentimental tradition, but gift-giving can be driven by the economy,” said Matthew Shay, the group’s president and CEO.
The low unemployment rate has contributed to the bullish projection for Valentine’s Day. The current unemployment rate of 3.6% hovers at historic lows is not expected to increase in the near future.
“My outlook for the U.S. economy is for continued growth at a moderate pace, with the unemployment rate, which is the lowest it has been in 50 years, remaining low,” said Michelle Bowman, a member of the Federal Reserve’s board of governors, during a speech at the Conference for Community Bankers on Monday.
Positive economic indicators usually reflect well on the sitting president and will likely provide a boost to President Trump in his bid for reelection.
The current state of the economy has helped prompt those celebrating Valentine’s Day to spend an average $196.31, up 21% over last year’s previous record of $161.96. Overall spending is expected to rise 32% from last year’s record of $20.7 billion.
Millennials are expected to spend the most this Valentine’s Day season by shelling out an average of $208, according to a Bankrate survey. Generation X is expected to spend $160, on average. Baby boomers and the silent generation are projected to spend an average of $101 and $43, respectively.
Younger adults are more likely to be in newer relationships, meaning millennials may feel pressure to spend more to impress their partner, according to Megan Gorman, founder and managing partner at Chequers Wealth Management, an investment advisory firm in San Francisco, California.
“It’s part of courtship,” Gorman said in prepared remarks in the Bankrate survey. “Millennials are still dating, they’re getting married later or are in the early stages of their marriage. For them, spending on this stuff becomes more important.”
Social media and the internet may also be pressuring millennials to spend, according to Gorman. Sites such as Facebook, Instagram, and Snapchat come with an inherent pressure to impress friends and followers.
Couples who have been together for less than six months are projected to spend $700 this Valentine’s Day. That compares with $453 for those who have been together between six months and less than two years, and $157 for those who have been together for between two years and five years, according to the Bankrate survey.
The NRF surveyed 7,267 adult consumers and was conducted Jan. 2nd through the 9th. Bankrate surveyed 2,602 adults between Jan.15th and the 17th.
