U.S. holiday spending will grow by 3% to 4% over the 2022 holiday to reach record levels of between $957.3 billion and $966.6 billion, the National Retail Federation said Thursday.
This year’s holiday spending is consistent with the average annualized increase of 3.6% between 2010 and 2019, NRF said. It also represents a slower pace than the past three years, when goods-buying soared amid trillions of dollars of pandemic-related federal stimulus provided to consumers, NRF said.
“It is not surprising to see holiday sales growth returning to pre-pandemic levels,” NRF President and CEO Matthew Shay said. “Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.”
Online and other nonstore sales, which are included in the total, are expected to increase between 7% and 9% to a total of between $273.7 billion and $278.8 billion. That is up from $255.8 billion last year.
NRF’s forecast is based on economic modeling that considers employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales. NRF’s calculation excludes auto dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as Nov. 1 through Dec. 31.
The holiday forecast undercounts seasonal spending because 43% of holiday shoppers planned to start making purchases before November, according to a separate NRF-commissioned survey. The forecast also excludes holiday purchases that may be made in January 2024.
“Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates,” NRF Chief Economist Jack Kleinhenz said. “We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace. Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars.”
NRF expects retailers will hire between 345,000 and 450,000 seasonal workers, in line with 391,000 seasonal hires in 2022. Some of this hiring may have been pulled into October to support retailers’ holiday buying events in October, NRF said.
Speaking Thursday at the CNBC Evolve Global Summit, FedEx Corp. (NYSE: FDX) President and CEO Raj Subramaniam said that retailers have moved beyond the inventory destocking cycle but haven’t entered the restocking phase. Subramaniam also said that spending between goods and services is returning to balance after a tilt toward goods purchases during and immediately after the pandemic, and then a shift to spending on so-called experiences once the pandemic was in the rearview mirror.
Subramaniam said the industrial economy remains weak in the U.S. and in many parts of the world.
