Holiday spending increased despite higher prices

While holiday spending increased throughout the nation, its increase paced behind last year’s numbers.

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.
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