According to the latest measure by Mastercard SpendingPulse, holiday sales in the United States rose by 3.1% from the beginning of November through Christmas Eve.
This increase is slower compared to the 7.6% growth from the previous year.
Driving the news: The slower sales growth aligns more closely with typical holiday season trends, following a surge in spending observed last year during the same period.
- Despite projections of a 3.7% increase, the actual sales growth remained slightly lower than expected.
- Specific sales figures showed that clothing sales rose by 2.4%, while jewelry sales fell by 2% and electronics saw a slight dip of around 0.4%.
- Online sales experienced a significant jump of 6.3% compared to the previous year, while in-person spending saw an increase of 2.2%.
What it matters: Consumer spending is closely monitored, especially during the holidays, as it accounts for nearly 70% of the U.S. economic activity.
- Concerns had risen prior to the holiday season about consumers’ willingness to spend due to higher prices for daily necessities, lower savings, and increased credit card delinquencies.
- Retailers responded by offering early discounts on holiday merchandise and being cautious about inventory levels.
- The Federal Reserve’s favored inflation gauge shows that while prices are easing, they remain higher in sectors such as restaurants, car shops, and rent.