Holiday Spending Expected To Increase This Year Despite Consumers Acting 'More Cautiously'

America's shoppers are expected to make retailers' days merry and bright this holiday season by "cautiously" increasing their spending over last year, according to the National Retail Federation.

The industry group forecast Tuesday that total sales in November and December would grow between 2.5% and 3.5%, compared to the same period in 2023. That means retailers could ring up $979.5 billion to $989 billion worth of purchases.

The holiday outlook matches the NRF's earlier percentage forecast for the entire year, during which consumers are expected to spend between $5.23 trillion and $5.28 trillion. That's up from $5.1 trillion in 2023.

"The economy remains fundamentally healthy and continues to maintain its momentum heading into the final months of the year," NRF president and CEO Matthew Shay said. "The winter holidays are an important tradition to American families, and their capacity to spend will continue to be supported by a strong job market and wage growth."

NRF chief economist Jack Kleinhenz also expressed continued optimism over the "pace of economic activity and growth" during the second half of the year.

"Household finances are in good shape and an impetus for strong spending heading into the holiday season, though households will spend more cautiously," he said.

Online and other non-store purchases are expected to account for $295.1 billion to $297.9 billion in sales, up 8% to 9% over last year, when the total was $273.3 billion, the NRF said.

But this year's projected increase in core holiday spending will be the smallest since 2018, when sales grew by a mere 1.8%, according to U.S. Census data cited by the NRF.

Since then, the biggest spike came in 2021, when pandemic-weary consumers boosted their spending by 12.4%.

That followed updated guidance from the Centers for Disease Control and Prevention that eased limited holiday gatherings to household members but recommended that people get vaccinated against COVID-19.

The NRF also forecast that retailers would hire 400,000 to 500,000 seasonal workers to handle holiday shoppers this year, down from 509,000 last year.