New York — American shoppers are expected to spend more this holiday shopping season than last year despite economic uncertainty and higher prices.
A 2025 forecast released by the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared to last year.
The group said retailers generated $976 billion in holiday sales last year.
“We’re seeing really positive behavior and engagement from consumers,” Matthew Shay, NRF’s president and CEO, told reporters on a call Thursday. “In fairness, that came as a bit of a surprise.”
But Shay said more Americans are becoming selective and focusing on discounts. While spending is expected to rise again, the growth of that spending may be declining.
This is still greater than the average increase of 3.6% between 2010 and 2019. Americans then increased spending during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and rose 12.5% in 2021, according to the NRF.
The group’s holiday forecast is based on economic modeling using several key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF calculations exclude auto dealers, gasoline stations and restaurants to focus on core retail trade.
Holiday spending represents 19% of the retail industry’s annual sales, although the number is much higher for some retailers, according to the NRF. Consumer spending in the United States is closely watched because it contributes about 70% of the country’s gross domestic product.
However, this year’s forecast comes during the longest government shutdown in US history. No government data has been released on the labor market or retail sales since the lockdown began 37 days ago.
“Forecasting is increasingly challenging in this environment,” Shay acknowledged.
However, the NRF’s forecast is in line with other estimates, which point to a slowdown in growth.
Mastercard SpendingPulse, which tracks spending across all payment methods including cash, expects holiday sales to rise 3.6% from Nov. 1 through Dec. 24. This compares to an increase of 4.1% last year.
Deloitte Services LP expects holiday retail sales to rise 2.9% to 3.4% from November 1 to January 31, compared to 4.2% last year.
Adobe expects online sales in the United States to reach $253.4 billion this holiday season, representing growth of 5.3%. This is lower than last year’s growth of 8.7%.
Even so, US consumer spending remained resilient Consumer confidence It has eroded.
Consumer behavior is changing with a greater focus on finding deals, said Mark Matthews, chief economist and executive director of research at NRF. NRF executives said the frequency of family nights out at a restaurant is declining.
Matthews said the timing of the government shutdown “is a big problem,” noting that it led to a loss of private sector income, which eroded consumer demand.
Matthews said spending should recover once the government shutdown ends, but there are broader issues of concern that will not be resolved when the government shutdown ends.
According to analysts, the gap between rich families and low-income families is widening.
Based on spending from credit card customers and banks, Bank of America found that spending growth among low-income households rose 0.6% in September compared to the same period last year. Among high-income groups, spending rose more than four times as quickly, or 2.6%, in September. Wages grow faster for higher-income families.
This makes it more difficult for low-income families to keep up when tariffs and other economic factors drive up prices.
In a separate report this week, Bank of America estimated that US consumers bear 50% to 70% of the costs of US tariffs, and that burden is expected to grow.
“We believe there is compelling evidence that tariffs have pushed inflation higher for consumers,” Stephen Juneau and Aditya Bhave, economists at Bank of America, wrote.
At the same time, American companies announced tens of thousands of… Job cuts. Some companies have indicated higher operating costs from the new Definitions Under the Trump administration, as well as shifting consumer spending, restructuring companies, or increasing spending on artificial intelligence.
This has led to retailers Retreat from hiring seasonal workers.