The National Retail Federation is forecasting a total spending gain of between 3% and 4% for November and December, putting the total between $957.3 billion and $966.6 billion. That’s a record and follows a spending gain of over 5% last year, pushing the seasonal spending gains back to pre-pandemic levels.
Between 2010 and 2019, annual holiday increases averaged 3.6%.
Online sales this year are expected to make more significant gains, rising between 7% and 9%, to reach $273.7 billion and $278.8 billion.
While there is plenty of handwringing over macroeconomic challenges, the Washington D.C.-based trade organization says consumers are feeling steady -- and even celebratory -- sailing into the winter holidays.
“We've seen strength and resilience across the consumer sector,” said Matthew Shay, president of the NRF, in a conference call to release the forecast. “Certainly, there's been an evolution in how consumers allocate their dollars from month to month. Yet consumer spending has kept the economic expansion on a steady and solid path forward.”
He said people are encouraged by falling inflation rates, rising wages and an increasingly encouraging job outlook, and he points out that retail sales have grown for 41 consecutive months since May 2020.
Jack Kleinhenz, the group’s chief economist, added that heating costs are stabilizing and even falling, adding to consumers’ confidence. He notes that spending on services remains somewhat stronger than on goods.
Commenting on the number of “unmatched peculiarities” that have shaped forecasts in the past few years, Kleinhenz said many aspects of retail appear to be normalizing, with the number of seasonal hires roughly matching the number of retail openings. The unemployment rate in the retail sector is close to the national average.
The NRF says people continue to pay close attention to gasoline prices. The trade group is also tracking credit card use and the impact of rising interest rates on family budgets. “That has an impact on spending,” Kleinhenz said.
Last month, the NRF released a per-person spending forecast, projecting an average of $875. That includes gifts, decorations, food and other holiday-related purchases, and is up $42 from last year.