Christmas bonuses could be a casualty of inflation, survey finds

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Christmas bonuses could be on the chopping block at small businesses around the U.S. this holiday season as persistent inflation may play the role of the Grinch, according to a new survey.

The November edition of the Freedom Economy Index, a joint project of PublicSquare and RedBalloon, surveyed small business owners and found that 42% of business owners who traditionally give Christmas bonuses to their employees said they can’t afford them this year. 

Another 28% of business owners surveyed said they plan to provide Christmas bonuses that will be smaller than in past years. About 25% said Christmas bonuses will be about the same as past years, while roughly 5% said bonuses will be bigger this year relative to prior years.

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About 42% of small business owners surveyed by PublicSquare and RedBalloon said they can't afford to issue their usual Christmas bonuses this year. (iStock / iStock)

About 52% of retail business owners who responded to the survey said their Black Friday and Christmas sales were «much slower» than average, while about 20% each said sales were about average or slightly less than average.

Persistent inflation played a key role in the challenges facing business owners. While inflation has come down from the 40-year high of 9.1% in June 2022, it remained at 3.2% in October – well over the Federal Reserve’s 2% target – despite the Fed raising interest rates to their highest level in two decades to tamp down rising prices.

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