Ever since the economy started coming out of the worst of the pandemic recession, consumers have been the ones juicing this economy — despite inflation, rising interest rates and fears of recession.

​Consumer spending was up in October, and in just a few days we’ll find out how it did in November. The question is: How much longer can we keep on spending?

You know those white elephant parties where you buy gifts for people you don’t really know, then get stuck with literally the worst present ever? 

“I’ve never been that interested in those to begin with, so this was a great reason to cut back on that spending,” said Noah Lomax, who lives in Chicago and works in marketing. He isn’t necessarily budgeting, he’s just being more careful here and there.  

“Instead of going out with friends for drinks, we’ll stay in and have friends over for drinks,” he said.

The reason is good ol’ inflation. “There are some routine things I do that I’m like, ‘Oh, wow. That was quite a bit more than I remember it being the last time,'” Lomax said. “And then when you look at the end of the month, everything is up a bit.”

Between the cutbacks and rising prices, Lomax said his spending is about flat. That’s exactly what Lydia Boussour, a senior economist at EY-Parthenon, expects from most consumers next year.

“Overall, we are expecting consumer spending to flatline in 2023, so that would be a pretty weak outcome,” she said.

Here’s why Boussour is expecting consumers to cool it. First, she thinks the labor market is likely to get worse, which would trigger anxiety. Second, consumers are burning through their savings. 

“Credit card balances are up sharply from a year ago, and if you look at the savings rate in October, it was down to one of its lowest levels on record.”

Consumers are feeling it. “In our most recent monthly tracker, 4 in 10 consumers say their financial situation worsened in the last 12 months,” said Deloitte’s Stephen Rogers. That’s souring many people’s spending plans.

“Compared to last fall, consumers have been signaling lower spending intentions in all categories, except housing, utilities, groceries and transportation,” Rogers added.

That said, there are also signs of strength. “On the plus side, you’ve got low unemployment,” said Sarah Wyeth with S&P Global Ratings — which is a Marketplace underwriter. “Household balance sheets are healthy, and there’s still this pent-up demand for in-person social events, travel, etc.”

Wyeth predicted that consumer spending will still have some life in it next year, with growth of about just 1%. But she said it is — as it has been these past few years — a very murky future.