Holiday spending in the United States is projected to achieve record-breaking levels during the months of November and December in 2023.
It is expected to increase by approximately 3-4% compared to 2022, reaching a range of $957.3 billion to $966.6 billion, according to data from the National Retail Federation (NRF).
While this growth rate is slower in comparison to the last three years, when extensive government stimulus measures led to exceptionally high retail spending during the pandemic, the holiday spending forecast for this year aligns with the average annual increase of 3.6 percent observed from 2010 to 2019, reads a press release.
NRF’s President and CEO, Matthew Shay said, “It is not unexpected to witness holiday sales growth returning to pre-pandemic levels, given the overall stability of household finances, which continue to support consumers’ purchasing capacity.”
The shift in consumer behavior brought about by the COVID-19 pandemic has resulted in a substantial increase in online shopping. Online and other non-store sales, included in the overall spending projection, are anticipated to surge by 7-9 percent, amounting to a range of $273.7 billion to $278.8 billion, up from the $255.8 billion recorded in the previous year.
Jack Kleinhenz, the chief economist of NRF, emphasized that consumers remain resilient despite challenges such as inflation, higher fuel costs, stringent credit conditions, and elevated interest rates. Solid job and wage growth are expected to be key factors supporting holiday spending. Consumers are likely to seek discounts and deals to maximize their budgets.
Besides that, to meet the heightened holiday demand, NRF predicts that retailers will hire between 345,000 and 450,000 seasonal workers, in line with the 391,000 seasonal hires made in the previous year.
Some of this hiring may have been initiated in October to support retailers’ holiday shopping events during that month.
Despite extensive preparation for the holiday season, retailers may face unpredictable impacts from weather conditions. This year’s holiday retail spending could be influenced by residual effects from El Niño, depending on the strength and persistence of this weather phenomenon.
NRF’s holiday forecast relies on economic modeling that takes into account various indicators, including employment, wages, consumer confidence, disposable income, consumer credit, and past retail sales.
The calculation excludes automobile dealers, gasoline stations, and restaurants to focus exclusively on core retail. The holiday season, as defined by NRF, encompasses the period from November 1 to December 31.
