US retail trade group forecasts healthy holiday sales, in part due to inflation

NEW YORK (AP) — Don't count out U.S. shoppers when it comes to shelling out money for the winter holidays despite higher fuel prices and other financial pressures.The nation's largest retail trade group said Thursday that it expects American consumers will collectively spend $1.01 trillion this November and December, which would be 4.2% more than during the same months last year.The increase reflects more than seasonal good cheer, according to economists. The National Retail Federation and other organizations that have issued holiday forecasts said they expected higher consumer prices to account for about half of the anticipated growth.

Moreover, higher income shoppers will fuel a lot of the spending, retail experts say.“We all acknowledge households continue to navigate persistent inflation and uneven confidence about the economy,” National Retail Federation President and CEO Matthew Shay told reporters on Thursday. “But throughout the year, consumers have repeatedly shown that holidays and spending on loved ones are priorities. We’re confident that pattern is going to continue through the 2026 winter holidays.”Retailers rang up $972 billion in holiday sales last year, which was 3.1% more than the year before that, the trade group said.At 4.2%, NRF's growth projection is above the actual gains from the last 20 years, which averaged 3.1% when excluding the outsized holiday spending of pandemic-era 2020 and 2021, according to Mark Mathews, the trade group's chief economist.The forecast, which was not adjusted for inflation, is in line with most other holiday predictions so far.

The outlooks illustrate an ongoing disconnect between the dismal consumer confidence that shows up in monthly surveys and Americans' willingness to keep spending.The U.S. war with Iran has driven up gasoline prices for drivers and caused worries about all kinds of products getting more expensive as high diesel prices make transporting goods costlier for retailers.The average price for regular gasoline rose to $4.33 per gallon Thursday, according to motor club AAA. Before the war began, gas cost less than $3 a gallon.Experts say such higher pump prices will continue to squeeze lower-income shoppers, while higher-income shoppers buoyed by stock market gains will keep splurging on discretionary purchases.“We’ve seen disruption after disruption kind of knock people off kilter, and then th…

The nation’s largest retail trade group said Thursday that it expects American consumers will collectively spend $1.01 trillion this November and December, which would be 4.2% more than during the same months last year. The increase reflects more than seasonal good cheer, according to economists. “We all acknowledge households continue to navigate persistent inflation and uneven confidence about the economy,” National Retail Federation President and CEO Matthew Shay told reporters on Thursday.

At 4.2%, NRF’s growth projection is above the actual gains from the last 20 years, which averaged 3.1% when excluding the outsized holiday spending of pandemic-era 2020 and 2021, according to Mark Mathews, the trade group’s chief economist. The forecast, which was not adjusted for inflation, is in line with most other holiday predictions so far. The average price for regular gasoline rose to $4.33 per gallon Thursday, according to motor club AAA.

Before the war began, gas cost less than $3 a gallon. Experts say such higher pump prices will continue to squeeze lower-income shoppers, while higher-income shoppers buoyed by stock market gains will keep splurging on discretionary purchases. “We’ve seen disruption after disruption kind of knock people off kilter, a…