US Census Bureau data revealed a month-over-month increase of consumer retail in November. However, not every consumer spent the same way, with older generations spending more consistently than younger generations. With more headwinds on the horizon, including student loan payments, will spending patterns between old and young consumers change at all in 2024?

Bank of America Institute Senior Economist David Tinsley joins Yahoo Finance to discuss the data and how generational trends could be expected to shift at all in the new year.

"What we noticed was the older generations were spending firmly throughout November on holiday items. The younger generations were holding back until the holiday weekend, and then they ramped spending," Tinsley outlines. "Looking to next year, I think what I say is the fundamentals remain broadly in good shape right now. The labor market has slowed, but it is certainly not slowing precipitously. The deposits, the savings, and checking account cash that people have on hand to support their spending is coming into the new year in relatively high still, compared to where it was before the pandemic."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

RACHELLE AKUFFO: And, David, I want to dig in into how different demographics are spending, because we talked about younger consumers here. And in your data here, they're more cautious in their holiday spending than baby boomers. You also have gen X and millennials really honing in on some of these promotional periods. How does that factor into what we can expect into 2024, especially as some of these bills come due?

DAVID TINSLEY: The jury's out, really, on spending over the holiday season for the generation. So what we noticed was that the older generations are spending firmly throughout November on holiday items. The younger generations were holding back until the holiday weekend, and then they ramped spending. And in a survey we ran, we found, actually, that the millennials weren't particularly planning on cutting back their holiday spending, relative to last year, so the jury's out. They may come good if you like and keep spending throughout December.

Looking to next year, I think what I'd say is the fundamentals remain broadly in good shape right now. The labor market, as we discussed, has slowed, but is certainly not slowing precipitously. The deposits, the savings, and checking account, cash that people have on hand to support their spending is coming into the new year relatively high, still, compared to where it was before the pandemic. So across the piece, there's support.

There are headwinds I think that particularly hit the younger gen's. So I'm thinking here of student loan repayments, utility bills, child care costs, up 30% or so, relative to pre-pandemic, so that particular cohort getting hit quite hard there. Renters, of course, have suffered pain in the past. So I think the headwinds are blowing harder on the young, but the overall picture is pretty solid.

RACHELLE AKUFFO: And so, David, as we look ahead to 2024, and obviously still waiting for all of the medicine from the Fed's actions to trickle through the economy, what do you think are some of the key things you'll be watching for in consumer behavior?

DAVID TINSLEY: Well, I guess, really how these headwinds play out and how the consumers cope with them. So at the moment when we look at our data, we can look at people who are making student loan payments, have a look at their spending, and we're not seeing any real significant signs of a pullback. So that's good news, but of course, there's a ways to go in that story.

Some people are making use of the administration's on ramp and haven't started paying yet. And then all these other cost factors I was mentioning, childcare costs, utilities, et cetera, they will come to pass. I think at the end of the day, it's going to be down to the labor market. If the labor market slows in a sharper way than most economists are expecting, then I think there'll be more pain. But at the moment, from our data, things are fairly benign, I'd say.