Consumption resilience under economic clouds: U.S. holiday retail sales expected to surpass $1 trillion for the first time.

The National Retail Federation (NRF) predicts that despite uncertain economic conditions and rising prices, American consumers' spending this holiday shopping season is expected to exceed last year's. The organization's forecast for 2025, released on Thursday, shows that consumer total spending during the November to December period will be between $1.01 trillion and $1.02 trillion, an increase of 3.7% to 4.2% from last year. This will be the first holiday shopping season in US history to surpass one trillion dollars in retail sales. NRF data shows that total retail sales during the holiday season last year were $976 billion. "We see consumers' behavior and engagement as very positive," NRF President and CEO Matthew Shay said in a conference call on Thursday. "To be honest, this is somewhat unexpected." However, Shay also pointed out that more and more Americans are becoming more selective, focusing more on discounted goods. While spending is expected to increase again, the growth rate may slow down. Nevertheless, this growth rate is still higher than the average of 3.6% during the period from 2010 to 2019. NRF data shows that during the COVID-19 pandemic, Americans' spending increased significantly, with holiday season sales growing by 8.9% in 2020 and soaring by 12.5% in 2021. The organization's holiday forecast is based on economic models that use various key economic indicators, including consumer spending, personal disposable income, employment rate, wage levels, inflation rate, and previously released monthly retail sales data. To focus on the core retail sector, the NRF statistics exclude auto dealers, gas stations, and restaurants. According to NRF data, holiday spending accounts for 19% of the retail industry's annual sales, but for some retailers, this proportion is much higher. American consumer spending is closely watched as it accounts for about 70% of the US gross domestic product. However, at the time of this year's forecast release, the US is experiencing the longest government shutdown in history. Since the shutdown began 37 days ago, no employment market or retail sales-related data has been released by the government. "In this environment, the difficulty of forecasting is increasing," Shay acknowledged. Nevertheless, the NRF's forecast is in line with estimates from other organizations, all pointing to a slowdown in growth. Mastercard SpendingPulse, which tracks spending on all payment methods including cash, predicts that holiday sales will increase by 3.6% from November 1 to December 24. This is compared to a 4.1% increase last year; Deloitte predicts that holiday retail sales will grow by 2.9% to 3.4% from November 1 to January 31 next year, while the increase last year was 4.2%; Adobe expects that online sales in the US during the holiday season this year will reach $253.4 billion, with a growth rate of 5.3%. This is lower than last year's growth rate of 8.7%. Despite consumer confidence being shaken, American consumer spending remains resilient. NRF Chief Economist and Research Director Mark Matthews said that consumer behavior is changing, with consumers focusing more on finding bargains. The organization's executives also pointed out that the frequency of families dining out is decreasing. Matthews said that the timing of the government shutdown "is definitely a problem," and noted that it has led to a reduction in income in the private sector, which in turn weakens consumer demand. Matthews said that after the government shutdown ends, spending should rebound, but there are still some broader concerns that will not be resolved with the end of the shutdown. Analysts point out that the gap between wealthy families and low-income families is widening. According to American Bank's findings based on its credit card and banking customers' spending, spending by low-income families in September increased by 0.6% year-on-year. In contrast, the spending growth rate for the high-income group was more than four times that of the former, increasing by 2.6% in September. And the wage growth rate for high-income families is faster. Against the backdrop of tariffs and other economic factors pushing up prices, this makes it harder for low-income families to make ends meet. American Bank estimated in another report this week that American consumers bear 50% to 70% of the US tariff costs, and this burden is expected to increase. "We believe there is conclusive evidence that tariffs have raised consumers' inflation levels," American Bank economists Stephen Juneau and Aditya Bhave wrote. At the same time, American companies have announced layoffs of tens of thousands of people. Some companies cite reasons such as increased operating costs due to new tariffs imposed by the Trump administration, changes in consumer spending patterns, corporate restructuring, and increased spending on artificial intelligence.