Holiday Shoppers Boost Spending by 3.8% Despite Price Increase

Holiday shoppers were out in full force this year, despite the higher prices they faced on many everyday items. Data show that sales increased by 3.8% from the beginning of November through Christmas Eve, surpassing last year’s 3.1% growth. The final five days leading up to Christmas accounted for 10% of the total spending, showing just how significant those last-minute purchases can be.

With five fewer days between Thanksgiving and Christmas this year, retailers were really feeling the pressure to get people in the door early and often. Michelle Meyer, Chief Economist at Mastercard Economics Institute, noted that consumers were eager to spend, but were looking for good value, leading to a surge in online sales during major shopping events.

Clothing sales saw a solid 3.6% increase, primarily driven by online shopping. And it’s not just clothes; spending on restaurants, electronics, and jewelry also experienced growth. Online sales rose by 6.7% compared to last year, while in-person spending saw a 2.9% increase.

Consumer spending is a critical part of the economy, accounting for nearly 70% of economic activity in the U.S. That’s why economists closely monitor holiday spending patterns to gauge the financial well-being of Americans. The latest government data shows that retail store activity has increased, especially in the auto industry, as a result of recent storms and attractive discounts.

Looking ahead, the National Retail Federation anticipates that shoppers will have spent between $979.5 billion to $989 billion from November to December, representing a 2.5% to 3.5% increase compared to the previous year. While slower than last year’s growth, retailers are optimistic about the overall performance despite starting discounts early in October.

Overall, retailers had a solid start to the holiday season in 2024. As we await more comprehensive data on Americans’ spending habits, it’s clear that despite challenges like higher prices, shorter shopping seasons, and distractions like elections, shoppers still found ways to enjoy the holiday spirit and support businesses across the country.