Holiday spending expected to grow despite inflation pressure

Nov. 3 (UPI) — Rising inflation is not expected to have a major impact on holiday retail spending in the United States this season, according to a National Retail Federation forecast released Thursday.

The NRF report forecasts holiday retail sales in both November and December to grow between 6% and 8% over last year. That would put spending at between $942.6 billion and $960.4 billion.

Holiday sales grew 13.5% last year during the same period over the previous year, totalling $889.3 billion.

Over the past 10 years, sales have grown by an average of 4.9% annually.

This comes as the price of many consumer goods, including food, continues to rise. The Personal Consumption Expenditures Price Index, rose by 0.5% over August and 5.1% from a year ago. The core PCE excludes volatile food and fuel.

“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” NRF President and CEO Matthew Shay said in a statement.

“In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”

Online and other non in-store sales are expected to see between 10% and 12% growth to between $262.8 billion and $267.6 billion, up from $238.9 billion last year, according to the NRF forecast.

“The holiday shopping season kicked off earlier this year – a growing trend in recent years – as shoppers are concerned about inflation and availability of products,” NRF Chief Economist Jack Kleinhenz said in a statement.

“Retailers are responding to that demand, as we saw several major scheduled buying events in October. While this may result in some sales being pulled forward, we expect to see continued deals and promotions throughout the remaining months.”

Retailers are expected to hire between 450,000 and 600,000 seasonal workers to deal with the temporary demand. That figure is lower than the 669,800 seasonal hires in 2021.