Spending in the US is likely to reach a record high in November and December 2023, but growth could slacken from peak pandemic periods, the National Retail Federation (NRF) said.

NRF expects holiday retail sales to grow between 3 per cent and 4 per cent to US$957.3 billion to US$966.6 billion from year-ago figures. By comparison, sales in 2022 reached then record highs of US$929.5 billion.

NRF President and CEO Matthew Shay explained, “It is not surprising to see holiday sales growth returning to pre-pandemic levels. Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.”

A more sluggish growth rate, however, can be expected amid “inflation, higher gas prices, stringent credit conditions and elevated interest rates.”

NRF Chief Economist Jack Kleinhenz noted, “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.”

Americans are likely to spend US$875 on average on gifts, decorations, food and other key seasonal items, according to NRF’s latest consumer survey conducted by Prosper Insights & Analytics.

NRF’s holiday forecast is based on economic modelling that considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather. NRF defines the holiday season as November 1 through December 31 of a given year.

Source: NRF