American retailers are heading into the holidays expecting a record: the National Retail Federation said on Thursday that November and December sales will grow 4.2 per cent to $1.013 trillion, up from 3.1 per cent growth to $972 billion last year. The catch is that roughly half of that growth is expected to come from higher prices rather than from shoppers buying more.
What the headline figure hides
A Deloitte survey of about 4,000 US consumers, released the same day, found average household holiday spending could rise 4 per cent to $1,654, with gains driven by younger shoppers. But the headline masks a split: the federation’s own chief economist warned that the experience of individual households would vary significantly by income, wealth and exposure to everyday costs such as petrol.
A two-speed holiday economy
The Federal Reserve’s October Beige Book found more than half of its districts reporting that consumer spending was being driven by high-income households, while lower-income shoppers grew more cautious. September inflation ran at 3.7 per cent, with petrol prices up 9.1 per cent in a single month, and recent surveys estimate that roughly two-thirds of American adults live paycheck to paycheck.
Retailers are planning cautiously: the federation expects stores to hire between 325,000 and 375,000 seasonal workers, roughly in line with last year’s 356,000, amid persistent inflation, higher interest rates and elevated consumer debt. Shoppers have already faced higher prices on electronics after the memory-chip shortage drove the worst quarter for phone shipments in 14 years.
The federation’s president, Matthew Shay, called consumers the “unsung heroes of our economy” and said the forecast reflected confidence that households would prioritise the holidays even while watching their budgets. The forecast, released in the federation’s annual holiday outlook, excludes car dealers, petrol stations and restaurants and covers 1 November to 31 December.
