The National Retail Federation (NRF) just released its holiday spending forecast—and the news is good for the nation’s retailers. Holiday spending will likely hit record levels from November 1 to December 31—growing between 3% and 4% to a total between $957.3 billion and $966.6 billion.
And online shopping (which is included in the total) should rise between 7% and 9% to a total of between $273.7 billion and $278.8 billion, up from $255.8 billion in 2022.
While this projected growth rate is below last year’s totals, the NRF says that the rate was attributable to stimulus spending. This year’s growth is a return to the pre-pandemic average annual holiday spending increase of 3.6% from 2010 to 2019.
These projections aren’t really surprising, given the actual state of the economy. A few weeks ago, the federal government announced that the Gross Domestic Product (GDP) for the third quarter increased at a surprising 4.9% annualized rate, the fastest in nearly two years. One of the primary drivers of that growth was consumer spending, which grew 4% for the quarter and was responsible for more than half of the total GDP increase.”
In other words, consumers are spending. NRF Chief Economist Jack Kleinhenz says, “Consumers remain in the driver’s seat and are resilient. We expect spending to continue through the end of the year on a range of items and experiences—but at a slower pace.”
And Kleinhenz adds, “Consumers will be looking for deals and discounts to stretch their dollars.”
All the positive news is not confined to retail. Kleinhenz notes that spending on services is “strong” and “growing faster than goods spending.” Spending on services is also back to pre-pandemic levels.”
The NRF also just released its latest holiday survey, which is separate from the holiday sales forecast. This study of consumer behavior shows that 43% of holiday shoppers have already started shopping, and it’s likely holiday shopping will extend into January.