Holiday sales forecast to hit record high this year, despite growing economic headwinds

foxbusiness.com:

Alex Mill Chairman Millard Drexler has the latest on the retail market on 'The Claman Countdown.'

Shoppers are expected to spend a record amount of money this holiday season even as they confront a number of economic headwinds, including steep borrowing costs, persistent inflation and the resumption of student loan repayments. 

The National Retail Federation released new projections on Thursday that suggest sales in November and December will rise by 3% to 4% year over year. That would amount to about $957.3 billion to $966.6 billion in spending during that period, the highest level on record.

Shoppers spent about $930 billion during the 2022 holiday season, with sales up about 5.4% from the previous year. Although sales are still expected to increase this year, the NRF is forecasting a slower pace of growth than the average 5% rate over the past decade. 

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The estimate, however, is closer in line with the growth rate seen between 2010 and 2019, which excludes the stimulus-fueled pandemic years. Holiday sales surged 9.3% in 2020 and 13.5% in 2021.

A pedestrian carries Nespresso shopping bags in San Francisco on Dec. 21, 2022. (David Paul Morris/Bloomberg via / Getty Images)

«We know consumers are becoming more cautious in the face of inflation and rising interest rates and the impact of monetary policy decisions,» NRF CEO Matthew Shay told reporters on a call. «And yet those consumers continue to spend on household priorities.»

A solid job market and big wage increases have helped to buoy consumer spending in recent months, despite high inflation. However, many economists expect consumers to grow more cautious in the coming months as student loan payments resume and