Retailers are forecasting a record holiday spending season. But for one in ten Americans, prices rising at the fastest pace in 30 years will dampen the Christmas spirit.

Inflation is especially taking a toll on lower-income families, who spend roughly a third of their earnings on essentials like food and energy. It's eating into recent wage increases, and the timing couldn't be worse after federal pandemic relief expired for about 7.5 million people.

"Anything that in the very short run puts a lot of pressure on family budgets across the board will cause more stress and damage to low-income households because they just have less scope to absorb it," said Josh Bivens, director of research for the Economic Policy Institute.

The holiday season will lay bare inequalities in the economic recovery. That's because a majority of Americans flush with over $2 trillion in excess savings accumulated during the pandemic are ready to splurge on gifts and holiday trips.

At the same time, more than 11% of Americans don't plan to spend at all, the greatest share in at least 10 years and more than double that in 2020, according to a Deloitte LLP survey. And the Salvation Army is bracing for a holiday season similar to that after the 2008 financial crisis, according to National Commander Kenneth Hodder.

A report Tuesday is expected to show U.S. retail sales advanced 1.5% in October from the prior month, which would be the most since March, according to estimates as of Monday's market close. However, the data aren't adjusted for inflation, and economists expect that price increases will hurt consumer demand in the near term.

Inflation has become a political lightning rod, deployed by senators like Joe Manchin, a moderate Democrat from West Virginia, to put the brakes on President Joe Biden's proposed $1.75 trillion social-spending package. Republicans say the administration's agenda will further boost consumer prices, which rose at the fastest annual pace since 1990 last month.

Wages also have increased in the past year amid a tight labor market, especially among lower-paid workers. But prices are rising faster. Inflation-adjusted average hourly earnings in October were 1.2% lower than a year earlier.

There's evidence that the end of pandemic relief has prompted former recipients making less than $50,000 annually to tighten their budgets. Average spending for those on unemployment benefits dropped 23% compared to the average in May, according to Bank of America Corp. data as of the week ended Oct. 9, the latest available. In the same period, spending of those not claiming benefits has been roughly steady.

Nery Peña, a first-grade teacher and single mom of two in Washington, D.C., says the child tax credit and stimulus checks were a lifeline this past year. While she's received around $500 a month since July, the next tax-credit payment due around Dec. 15 will be the last one unless Congress passes the social-spending package, and she's already started to curb her spending.

"Food prices are going up, gas prices are going up — prices are going up everywhere," said Peña, 27. "Thank God my daughters are understanding, but as a mom, it just sucks to tell your kids Christmas won't be that Christmas-y this year."

The Salvation Army is planning to serve more meals than in 2020's record year, and will need around 50% more funding to meet the buoyed demand, Hodder said. He expects rental and utilities assistance to lead the pack of requested aid.

"We're fearful of what we're calling 'pandemic poverty,'" Hodder said.

For those making $40,000 to $90,000, financial cushions will be drained in the next two to three months, according Bloomberg Economics.

Their hardship may not show in nationwide spending numbers. The top 10% of earners make up nearly half of personal outlays in the U.S., according to calculations by Wells Fargo & Co. earlier this year.

And so far there's no sign that wealthier families are pulling back spending. Quite the contrary: Households with an annual income of more than $150,000 will spend almost double the average amount this holiday season, according to a report from PwC.

Laurie Knecht, 53, doesn't have that kind of money. As a part-time massage therapist, she didn't qualify for extra unemployment assistance, and her son is above the age limit to be eligible for the child tax credit. All of her income goes to paying the bills — bills that are rapidly rising, especially ahead of a Chicago winter.

"Christmas can be kind of depressing, to be honest with you. I haven't bought anything for a long time." Knecht said. "The bills don't wait."

Bloomberg's Jordyn Holman contributed to this report.

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