Key Takeaways
- Retail spending hit $994.1 billion in November and December, coming in 4% higher than last holiday season, according to the National Retail Federation.
- The trade group was expecting holiday sales to grow between 2.5% and 3.5%.
- Cooling inflation helped spur spending, the NRF said, though many Americans remain “budget conscious.”
Retailers made out good on the gift-giving this season.
Consumers spent $994.1 billion in the last two months of 2024, according to the National Retail Federation, surpassing the trade group’s $979.5 to $989 billion forecast. “Core” retail sales—everything but gas, car and restaurant purchases—rose 4% from the 2023 holiday season, according to the NRF analysis of U.S. Census Bureau data, also more than the NRF expected.
The holidays wrapped up a year in which Americans spent a record $5.28 trillion, the NRF said. The group’s analysis isn’t adjusted for inflation.
“The spending pace was back to pre-pandemic growth and indicates a good start for the year ahead,” NRF Chief Economist Jack Kleinhenz said.
Business grew year-over-year in most categories tracked by the NRF. Americans spent 5.6% more at furniture and home goods stores compared to last November and December, the group said. Electronics and appliance stores saw a 3.7% rise, the NRF said.
Nearly 30% of the seasonal spending—$296.7 billion—occurred online or outside of physical stores, NRF said. Digital shopping surged, according to several analysts, while buying was less brisk in brick-and-mortar stores.
Americans were more comfortable spending because inflation has come down some since last winter, Kleinhenz said. The Consumer Price Index rose 2.7% in November over a year earlier, and 2.9% in December, but the cost-of-living estimate had more significant increases in late 2023, according to Bureau of Labor Statistics data.
Still, some Americans are growing concerned that inflation will rise again, and consumer sentiment dipped in January. Saving money remains a priority for many, according to Kleinhenz.
“Even though consumers are still relatively healthy and there was a notable increase in spending, they remain budget conscious,” he said.
The NRF’s analysis comes as the Census Bureau released December retail sales data that showed American consumers logging slightly less sales growth than expected when compared to November levels.
