The 2025 holiday season could set spending records with consumers expected to shrug off lingering inflationary pressures, increased trade tariffs on imported merchandise, and the government shutdown.
According to the National Retail Federation, retail sales in November and December will increase by 3.7% to 4.2% from last year, putting the total tab over $1 trillion for the first time in history.
“American consumers may be cautious in sentiment, yet remain fundamentally strong and continue to drive U.S. economic activity,” NRF President and CEO Matthew Shay said. “We remain bullish about the holiday shopping season and expect that consumers will continue to seek savings in nonessential categories to be able to spend on gifts for loved ones.”
To service the increase in spending, retailers are hiring additional workers with NRF estimates ranging from 265,000 to 365,000 seasonal workers. This is down, however from 442,000 new hires during the 2024 holiday season, as retailers could be waiting later in the season to more accurately gauge the need.
A notable headwind this year is the federal government shutdown, now in day 37.
“While many negative economic impacts are expected to be temporary, their magnitude will escalate the longer the shutdown lasts,” NRF said.
Related tickers: Amazon (AMZN), Walmart (WMT), Target (TGT), TJX Companies (TJX), Best Buy (BBY), Bath & Body Works (BBWI), Abercrombie & Fitch (ANF), American Eagle (AEO), Gap (GAP), Kohl’s (KSS), Macy’s (M), Dillard’s (DDS), Ross Stores (ROST), Costco (COST), Burlington Stores (BURL), Consumer Staples ETF (XLP), Consumer Discretionary ETF (XLY)