This story original appeared in our sister publication, Retail TouchPoints.
The National Retail Federation (NRF) predicts that spending from Nov. 1 to Dec. 31 will increase by 3.7% to 4.2% over the same period in 2024, translating to total spending of between $1.01 trillion and $1.02 trillion. By comparison, last year’s holiday sales rose 4.3% over 2023 to reach $976.1 billion.
The bullish forecast comes even as the economy struggles with tariff-related cost increases, a record-setting federal government shutdown and signs of a softening labor market. Nevertheless, the economy’s primary engine — consumer spending, which accounts for 68% of GDP — will fuel the industry’s first trillion-dollar season, according to NRF’s forecast.
“We’re seeing positive engagement and behavior from consumers, which is somewhat of a surprise based on where we thought we might be,” said NRF President and CEO Matthew Shay during a call discussing the forecast. “This can be explained by a lot of things, including the creative work of retailers to avoid passing on price increases caused by tariffs.”
Deloitte and Salesforce also have predicted sales increases for the 2025 season, although PwC is predicting a 5% decrease in overall average consumer spend for the holiday, compared to a 7% increase during holiday 2024.
Does Holiday Spending have a Protective ‘Moat’ Around it?
While NRF is forecasting a boost in overall holiday spending, Shay noted that the U.S. consumer’s “very strong spending behavior” now factors in budget constraints. “Inside that strength, consumers are being much more price-sensitive,” he said. “They’re thinking about things much more deliberately, finding options and value wherever they can.”
The impact on holiday sales will be lessened by the nature of the season, Shay added. “Throughout this year of tracking spending on holidays in particular, [we’ve found that] loved ones — family and friends — is a category of spending with a moat around it. That’s been a trend over the last four to five years — various religious and secular holidays all took on outsized importance with the COVID pandemic as an opportunity for celebration. And as one CEO said to me this week: ‘When it comes to the holiday season, somehow, every year, Santa Claus always comes.’”
Holiday Hiring Drops Dramatically
Retailers are being cautious about expenditures themselves, which may help explain the prediction that they will hire just 265,000 to 365,000 seasonal workers, compared to the 442,000 hired during the 2024 holiday season. The NRF forecast is in line with other predictions: last month, outplacement firm Challenger, Gray & Christmas forecast that U.S. would add less than 500,000 jobs this season, representing the smallest increase since the recession-battered 2009 holiday season. In Q4 2024, retailers added 543,100 jobs.
NRF’s holiday forecast is based on economic modeling using various key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail. NRF defines the holiday season as Nov. 1 through Dec. 31.
