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Holiday spending will be up this year, trade association says

Consumers plan to spend an average of $875 on holiday purchases this year, according to a consumer survey conducted by the National Retail Federation.
Holiday spending will be up this year, trade association says
Posted at 12:11 PM, Nov 02, 2023

Despite a number of factors, experts expect to see a rise in holding spending this year over last year.

Holiday sales will increase between 3% and 4% above last year’s holiday season, according to the National Retail Federation holiday sales forecast.

This means the association predicts somewhere between $957.3 billion and $966.6 billion in spending, compared to the $930 billion spent last year.

The holiday season is described as Nov. 1 to Dec. 31. These numbers are not adjusted for inflation.

According to a consumer survey by the NRF, consumers plan to spend an average of $875 on holiday purchases, which is $42 more than in 2022. This includes gifts, decorations, food, and other holiday-related items. Of the total, about $620 will be spent on gifts.

“We know consumers are becoming more cautious,” said Matthew Shay, CEO of the NRF, on a media call Thursday. “Yet those consumers continue to spend on household priorities.”

SEE MORE: Stores prepare for Thanksgiving: Who will join in cutting prices?

Shay explained that retail sales have grown year over year for 41 consecutive months, meaning every month since May 2020.

Yet, he understands consumers do face some headwinds. The NRF is paying attention to gas prices, credit card balances, inflationary pressure, and student loan payment obligations, to name a few. Geopolitical issues and the threat of a government shutdown can also impact consumer spending.

“The cumulative effect of all of these things is going to show some moderation in consumer behavior relative to the last several years of holiday spending,” Shay said.

This year, we can still expect to see a record level of spending, with consumers getting an earlier start than ever on their shopping, the forecast suggests.

“The composition of spending from goods to services will also define holiday sales trends,” NRF Chief Economist Jack Kleinhenz said. “Service spending growth is strong and is growing faster than goods spending. The amount of spending on services is back in line with pre-pandemic trends.”

About 4 in 10 consumers are taking advantage of retailers' spending events earlier in the season by starting in October or earlier, according to the NRF.

Around 58% plan to shop online.

The forecast also predicts holiday season retailers will hire 345,000 to 450,000 people, compared to the 390,000 hired last year.

@scrippsnews What will you be spending money on this #holiday season? A new forecast by the National Retail Federation shows a 3 to 4 percent increase in spending over last year. #economy ♬ original sound - Scripps News

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