Let’s start with the 2024 holiday season. The National Retail Federation (NRF) reported that newly released data from the U.S. Census Bureau shows that retail sales during the holiday period increased by 4% compared to 2023. This surpassed the NRF’s forecast that 2024 holiday sales would rise between 2.5% and 3.5% to a record $994.1 billion.
The NRF’s chief economist, Jack Kleinhenz, says: “Consumers went out to spend this season and clearly highlighted the solid growth of the U.S. economy. The pace of spending has returned to pre-pandemic growth.” Kleinhenz believes this “indicates a good start to the year.
He also states that 2024 sales were partially “driven by lower inflation compared to 2023.Record Sales in 2024
With the year ending so strong, it is not surprising that retail sales in 2024 set a record, reaching $5.28 trillion, a 3.6% increase, meeting the NRF’s sales growth forecast between $5.23 trillion and $5.28 trillion.What are the expectations for 2025?
Kleinhenz says that this strong economic performance, with sales resisting inflation, high interest rates, and other challenges last year, should continue to show strength in 2025. He states: “The U.S. economy ended 2024 on a high note, and the outlook looks promising for 2025. Recent performance shows that the economy is on solid footing and has been growing at a steady pace above its historical average. The labor market is healthy, unemployment is low, inflation has nearly fallen to the Federal Reserve’s target, although it remains somewhat unstable, and the direction of interest rates continues downward.”
The NRF has not yet released its forecast for 2025. Still, Kleinhenz believes that “there are good reasons to expect healthy economic growth in 2025, although its shape depends on many moving parts, [including] changes in trade, immigration, regulation, taxes, and spending policies and their impact on economic activity.”
Source: Currents