Holiday retail spending is expected to post a smaller annual increase than last year, according to a National Retail Federation (NRF) forecast that shoppers will push November and December retail sales 3.7% to 4.2% compared to 2024, lower than last year’s rise of 4.3%.
Despite the smaller potential rise, the total dollar amount would still outpace last year’s gains thanks to inflation, with the NRF saying consumer spending will likely range between $1.01 trillion to $1.02 trillion this year, higher than last year’s total of $976.1 billion.
According to expectations, this amount of holiday spending will be surprisingly high, given the turmoil in US trade policies and the ongoing federal government shutdown. “The economy continued to show surprising resilience in a year marked by trade uncertainty and persistent inflation,” Mark Matthews, chief economist and executive director of research at NRF, said in a statement. “As tariffs pushed up consumer prices, retailers tried to maintain prices given uncertainty about trade policies.”
Retailers are hiring for 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 slowing labor market. By comparison, there were 442,000 seasonal hires in 2024.
Matthews added that while seasonal hiring typically supports the labor market at this time of year, some hiring may have been postponed to support holiday buying events for retailers in October. Given the ongoing tariff situation, retailers will closely monitor spending patterns and wait to add staff if a boost is required 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 lead to a loss of private sector income, further eroding consumer demand. While many of the negative economic impacts are expected to be temporary, their magnitude will escalate the longer the lockdown continues.
