Shoppers’ holiday spending is expected to top $957 billion, a record amount

Consumers have shown resilience this year in the face of persistent inflation, and a new report predicts that this may continue through the holiday season.

The National Retail Federation, an industry trade group, said holiday spending is forecast to reach record levels this year — up 3% to 4% from last year. This would total between $957.3 billion and $966.6 billion.

“We know consumers are becoming more cautious in the face of inflation and rising interest rates and the impact of monetary policy decisions, and yet those consumers continue to spend on household priorities,” NRF President and Chief Executive Matthew Shay said in a news conference.

The strength of the job market and wage gains have helped sustain the spending, Shay said.

The NRF counts any spending between Nov. 1 and Dec. 31 as holiday spending, although consumers may start earlier to get better deals, a trend seen during other big shopping seasons this year, such as back-to-school. Nearly half of holiday shoppers began browsing and shopping before November this year, according to NRF data.

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This year’s holiday spending is expected to beat last year’s record spending of $929.5 billion, but the jump is predicted to be less dramatic. In 2022, spending rose 5.4% from the year before, compared with this year’s projected growth of 3% to 4%.

Online holiday shopping is expected to increase between 7% and 9% from last year, to total between $273.7 billion and $278.8 billion. In 2022, this figure was $255.8 billion.

Between January and September, retail sales have been up an average of 3.7% from the same period last year, Shay said. “I think we’re looking at consumer behavior and economic activity and retail sales that are very much in line with, or frankly slightly better than, pre-pandemic averages,” he said.

Holiday hiring will be roughly the same as last year with retailers employing between 345,000 and 450,000 seasonal workers, the NRF predicts. Companies made 391,000 seasonal hires in 2022.

The NRF considered economic headwinds such as the effects of increasing interest rates and high gas prices, as well as the resumption of student loan payments, when calculating the spending forecast. Shay said that these factors will lead to “some moderation in consumer behavior,” but 92% of American adults plan to celebrate the holidays, and most plan to spend.

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“We know that they will be out there engaged in commerce,” Shay said. “And while they’re doing so, they will be looking … for deals, for discounts, finding ways to make the most out of the monthly paychecks that they’re taking home.”