US holiday spending is expected to rise modestly compared to the previous year, amid a steady economy and strong job market.
Retail sales in November and December will rise between 2.5% and 3.5% year on year for a total of $979.5 billion to $989 billion, the National Retail Federation (NRF) predicted last week. By comparison, year-on-year sales in 2023 rose 3.8% to $964.4 billion.
“The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year,” said NRF CEO Matthew Shay. “The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth.”
The holiday spending forecast is in line with the NRF’s March prediction that annual sales for 2024 overall would grow 2.5% to 3.5%.
Online and other non-store sales are set to climb 8% to 9% year on year for the two-month holiday period, reaching between $295.1 billion and $297.9 billion, the NRF forecast. That compares to an 11% rise a year ago.
“We remain optimistic about the pace of economic activity and growth projected in the second half of the year,” said NRF chief economist Jack Kleinhenz. “Household finances are in good shape and an impetus for strong spending heading into the holiday season, though households will spend more cautiously.”
Other factors could affect holiday spending this year, the NRF added. The shopping period between Thanksgiving and Christmas this year is only 26 days, six shorter than last year. There could also be a slowdown due to the economic impact of hurricanes Helene and Milton, and the effects of the US presidential election have yet to be seen.
Image: A family shopping for holiday gifts. (Shutterstock)
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