Despite persistent inflation, Americans increased their Christmas spending, early data shows. This is a significant relief for retailers, who spent much of the year fearing that the economy would weaken further this year and that consumer spending would decline.
Retail sales from November 1 to December 24 rose 3.1% compared to the previous year, according to data from Mastercard SpendingPulse, which measures retail sales online and in physical stores across all payment forms. The figures, released on Tuesday (26), are not adjusted for inflation.
Spending increased in many categories, but restaurants experienced one of the largest jumps, 7.8%. Clothing rose 2.4%, and grocery products also saw gains.
The Christmas sales figures, driven by a healthy labor market and wage gains, suggest that the U.S. economy remains strong. The Federal Reserve’s campaign to control high inflation through interest rate hikes over the past few years has slowed the economy, but many economists believe a so-called “soft landing” is within reach. Solid job growth is allowing people to spend more.
In 2022, retail sales during the holiday season increased by 5.4%, according to the National Retail Federation. In 2021, they rose by 12.7%, the largest percentage increase in at least 20 years. Online sales growth also slowed in 2023, increasing by 6.3% compared to 10.6% from 2021 to 2022, according to Mastercard.
Although the economy is strong, Americans are being more mindful of how they spend, and this discretion has shaped this year’s shopping period.
Source: The New York Times