Holiday retail spending is predicted to post a smaller annual increase than last year, according to a National Retail Federation (NRF) forecast that shoppers will push retail sales in November and December up by 3.7% to 4.2% over 2024, coming in below last year’s hike of 4.3%.
Despite the smaller potential rise, the total dollar amount would still eclipse last year’s take thanks to inflation, as NRF said consumer spending will likely be $1.01 trillion to $1.02 trillion this year, above last year’s total of $976.1 billion.
According to the forecast, that amount of holiday spending would be surprisingly high, given turmoil in U.S. trade policies and the ongoing federal government shutdown. “The economy has continued to show surprising resilience in a year marked by trade uncertainty and persistent inflation,” NRF Chief Economist and Executive Director of Research Mark Mathews said in a release. “As tariffs have induced an uptick in consumer prices, retailers have tried to hold the line on prices given the uncertainty about trade policies.”
Retailers are hiring additional support to meet consumer demand this holiday season. NRF expects retailers to hire between 265,000 and 365,000 seasonal workers, in line with a slower-paced labor market. By comparison, there were 442,000 seasonal hires in 2024.
Mathews added that while seasonal hiring normally supports the job market this time of year, some hiring may have been pulled forward to support retailers’ holiday buying events in October. Because of the ongoing tariff situation, retailers will be closely monitoring spending patterns and waiting to make staff additions should demand strengthen throughout the holiday season.
Another headwind to spending this year is the federal government shutdown, the timing of which is particularly challenging just before the holiday season, NRF said. Delays in federal spending will result in a loss of private-sector income, further eroding consumer demand. While many negative economic impacts are expected to be temporary, their magnitude will escalate the longer the shutdown lasts.
