The NRF expects retail sales during the holiday period to grow between 2.5% and 3.5% over 2023.
“Even though the traditional kick-off to the holiday season began with Black Friday, many consumers had already started shopping earlier due to fewer shopping days before Christmas this year,” said NRF Chief Economist Jack Kleinhenz. “Early data suggests that conditions are aligning for a prosperous holiday retail season.”
Kleinhenz highlighted that U.S. economic growth remained strong in the third quarter, with Gross Domestic Product (GDP) expanding at a pace above many long-term growth estimates. Personal consumption continues to be a key driver of the economy, providing sustained momentum through the ongoing expansion.
The NRF’s forecast aligns with other positive economic indicators. A near-record 197 million shoppers participated in the Thanksgiving through Cyber Monday weekend, and 58% of holiday shoppers had already begun their purchasing by early November. Consumer sentiment also continues to rise, with the University of Michigan’s consumer sentiment survey climbing to 71.8 in November, its highest level since April.
Despite some challenges, including only 12,000 new jobs created in October due to natural disasters and labour strikes, the unemployment rate held steady at 4.1%. Employment grew by 104,000 jobs on a three-month average, and consumer spending remains strong. Disposable income was up by 5.1% year over year in October, and employee compensation rose by 5.7%.
“We’re seeing solid consumer fundamentals, with disposable income and compensation rising, while savings rates are also on the increase,” Kleinhenz noted. “Even with some signs of slowing, the economy is not contracting, and we remain optimistic for the holiday season.”
With GDP expected to grow at a 2% annualized rate in the fourth quarter, the NRF remains confident that the holiday season will contribute positively to overall retail growth.
