On Tuesday, October 15, the National Retail Federation (NRF), the largest retail trade organization in the United States, released a forecast stating that holiday spending by American consumers during the holiday shopping season from November to December will continue to grow, driving the total holiday sales to a historical high, but the sales growth rate will be slower than last year.

The 'holiday season' defined by the National Retail Federation runs from November 1 to December 31. It is expected that retail sales during these two months will increase by 2.5% to 3.5% compared to last year's 3.9% growth rate during the same period. However, in dollar terms, total retail spending during the winter holiday season is estimated to be in the range of 979.5 billion to 989 billion USD, surpassing last year's 955.6 billion USD and setting a new record high.

Online shopping will continue to be the main driving force behind the overall growth in holiday retail sales. Online and other non-brick-and-mortar store sales are expected to increase by 8% to 9% compared to last year, reaching 295.1 billion to 297.9 billion USD, higher than last year's 273.3 billion USD during the same period, but the year-on-year growth rate will be slower than last year's 10.7%. This year, U.S. retailers may recruit 0.4 million to 0.5 million seasonal workers to meet the growing consumer demand during the year-end holiday season, but even the upper end of the range is lower than last year's seasonal recruitment of 0.509 million.

The year-end holiday shopping season is important because holiday season sales typically account for over half of U.S. retailers' annual income, and consumer spending is a key pillar of the U.S. economy. Insufficient consumer spending may lead to a pessimistic outlook on the economy. NRF's calculations are based on government data such as employment, wages, consumer confidence, disposable income, consumer credit, and retail sales, focusing on 'core retail' indicators.

NRF President and CEO Matthew Shay evaluates the retail sales trend for the 2024 holiday season as 'steady growth', stating that the economic fundamentals remain healthy and will continue this momentum through the end of the year. The winter holidays are an important tradition for American families, and a strong job market and wage growth will continue to support Americans' spending power.

However, the organization's chief economist Jack Kleinhenz acknowledges that while household finances are strong, providing impetus for robust spending during the holiday peak season, American households will be more cautious in their spending. Matthew Shay also notes that U.S. interest rates remain relatively high.

Consumer indeed consider interest rates and persistent inflation issues, therefore it is expected that they will focus more on prices and be more pragmatic when making consumption decisions.

At the end of this year, the purchasing power of Americans is not as strong as in previous years, as evidenced by the Thanksgiving purchases made in October.

The annual survey commissioned by NRF to retail market research company Prosper Insights & Analytics shows that nearly 8,000 consumers asked in the first week of September about their Halloween shopping plans said they plan to spend an average of around $103.63, about $4.62 less than the record $108.24 spent last year, potentially leading to a 5% to 11.6 billion decrease in total Halloween spending this year, breaking the historical high.

The famously acerbic financial blog Zerohedge pointed out that some working-class families are reducing their purchases of Halloween outfits, decorations, and party supplies, despite Halloween being a widely beloved and highly participated all-around autumn celebration in the U.S. It is expected that lower to middle-class consumers will reduce these seasonal expenses this year due to the persistently high inflation and interest rates, leading to a slight decline in participation in various Halloween activities:

"The last time Halloween spending decreased year-on-year was during the (consumer confidence hit hard at the beginning of the pandemic) in 2020.

The bleak outlook for Halloween spending may indicate a continuing deterioration of the consumer environment in the USA, which is likely to worsen in the future, serving as a negative indicator for large shopping events such as 'Black Friday' and 'Cyber Monday' at the end of November.

Apart from mainstream industry organizations like NRF, other analysts also believe that American shoppers' sentiments during the holiday season will be more restrained this year.

For example, management consulting firm Bain expects retail sales to grow by 3% year-on-year in November and December, lower than last year's growth of 4.2%. Consulting firm AlixPartners expects sales to increase by 2-5% from October to December, lower than last year's 6% growth. Consulting and research company Customer Growth Partners predicts a 4% growth in sales during the holiday period, also slightly lower than last year's growth.

Deloitte even predicts that due to cautious shopping, the growth rate of holiday sales in 2024 will be the lowest level in six years (since 2018). Its latest holiday consumption forecast released on Tuesday points out that high prices have weakened consumer brand loyalty, and spending on experiences, decorations, and entertainment will be the driving force behind this year's consumption.

Overall, this year's holiday shopping spending growth in the USA is slowing down. It can be considered a historical average regression to the exceptionally high growth during the pandemic, returning to an average growth rate of 3.6% between 2010 and 2019. During the COVID-19 pandemic, holiday season sales reported by the NRF grew significantly by 9% in 2020, and soared by 12.4% in 2021.

In addition, this year's holiday shopping season faces multiple challenges, including Thanksgiving coming later shortening the season by six days compared to last year, the impact of hurricanes Helen and Milton on the economy, and potential temporary restraint on consumer behavior by the November U.S. presidential election. Some analysis also points out that while U.S. retail gasoline prices are lower than last year, many food prices are much higher than a few years ago, dampening consumer enthusiasm.

Financial blog Zerohedge also found that the U.S. personal savings rate plummeted from over 5% to 2.9% within a year, reaching the lowest level since the Lehman Brothers bankruptcy, as excess savings during the pandemic disappeared almost completely. Many Americans are choosing to use credit cards to support consumption, with consumers across all income levels being hit by the decline in personal savings, implying a bleak outlook.