Let’s start with the 2024 holiday season. The National Retail Federation (NRF) reports that data just released by the U.S. Census Bureau shows holiday retail sales increased 4% over 2023. This topped NRF’s forecast that 2024 holiday sales would increase between 2.5% and 3.5% —more than expected—to a record-setting $994.1 billion.
NRF Chief Economist Jack Kleinhenz says, “Consumers came out to spend this holiday season and clearly underscored the solid growth in the U.S. economy. The spending pace was back to pre-pandemic growth.” Kleinhenz believes this “indicates a good start for the year ahead.”
Online shopping continued to swell, rising 8.6% to $296.7 billion. But there was also a return to in-store shopping. And a stronger economy helped. Kleinhenz says that 2024 sales were partly “driven by lower inflation compared with 2023, particularly for goods. Even though consumers are still relatively healthy and there was a notable increase in spending, they remain budget conscious.”
These stats reflect “core retail holiday sales,” which the NRF defines as sales earned between November 1 and December 31. They exclude revenues from automobile dealers, gasoline stations, and restaurants.
Retail categories seeing the most growth:
- Furniture and home furnishings stores: +5.6%
- Electronics and appliance stores: +3.7%
- Health and personal care stores: +3%
- Clothing and clothing accessory stores: +2.8%
- General merchandise stores: +2.4%
- Grocery and beverage stores: +2.1%
- Sales for building materials, garden supply stores, and sporting goods stores were unchanged
Record-setting sales for 2024
With the year ending so strongly, it’s not surprising that 2024 retail sales set a record, coming in at $5.28 trillion, a 3.6% increase, meeting NRF’s forecast of sales growth between $5.23 trillion and $5.28 trillion.
What’s in store for 2025?
Kleinhenz says this strong economic performance, with sales withstanding inflation, high interest rates, and other challenges last year, should continue to show strength in 2025. He says, “The U.S. economy ended 2024 on a high note, and the outlook looks promising for 2025. Recent performance shows the economy is on solid footing and has been growing at a steady pace and above its historical average. The labor market is healthy, unemployment is low, inflation has fallen almost to the Federal Reserve’s target even though it remains somewhat sticky, and the direction of interest rates remains lower.”
The NRF hasn’t released its 2025 forecast yet. Still, Kleinhenz believes “there is good reason to expect healthy economic growth in 2025 even though its shape will depend upon a lot of moving parts, [including] changes to trade, immigration, regulation, tax and spending policies and their impact on economic activity.”
Rieva Lesonsky is President of Small Business Currents, LLC, a content company focusing on small businesses and entrepreneurship. While you can still find her on Twitter @Rieva, you can also reach her @Rieva.bsky.social and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Dollars picture by Urfin /Shutterstock
