Despite an upcoming holiday season touched by multiple variables — from the uncertain economy to the presidential election — U.S. consumers are still expected to spend more this year, just at a rate slower than last, according to the National Retail Federation.
The world's largest retail trade association's 2024 forecast, released Wednesday, showed winter holiday spending is expected to increase 2.5% to 3.5% from last year, adding up to as much as $989 billion in the upcoming two months. That's compared to $955.6 billion during the same months last year, but that tally was 3.9% more than the previous year.
Although it's a slight slump in growth, this year's percentage is still in line with the average 3.6% increase seen in the years before the pandemic, when consumer spending spiked 9% in 2020 and 12.4% in 2021 compared to the years before each.
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And it's a welcome sign, as various industries have aimed to draw back inflation-weary consumers who have lessened their expendable spending budgets. The NRF says that cautious attitude will continue into the holiday season but that the state of household finances implies a strong period ahead.
"The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year," NRF President and CEO Matthew Shay said. "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 NRF says online shopping will be the primary contributor for overall retail sales growth this year, increasing up to 9% since last year to as much as $297.9 billion. That's a jump from last year's $273.3 billion but, again, is at a slower pace, with non-store sales rising 10.7% in 2023 compared to 2022.
Beyond the added obstacles influenced by politics and finances, the NRF points to Hurricanes Helene and Milton as well as a shorter holiday shopping season as factors for the rate shifts this year. There are only 26 days between Thanksgiving and Christmas, which is an interval five days shorter than last year.
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