The National Retail Federation reports that holiday spending is expected to reach record levels when combining November and December, and will grow between 3-4 percent over 2022 to between $957.3-$966.6 billion.

“It is not surprising to see holiday sales growth returning to pre-pandemic levels,” says NRF president and chief executive officer Matthew Shay. “Overall household finances remain in good shape and will continue to support the consumer’s ability to spend.

Despite a slower growth rate compared with the past three years, when trillions of dollars of stimulus led to unprecedented rates of retail spending during the pandemic, this year’s holiday spending is consistent with the average annual holiday increase of 3.6 percent from 2010 to 2019.

Online shopping has been a major factor ever since the early days of the pandemic. Online and other non-store sales, which are included in the total, are expected to increase between 7-9 percent to a total of between $273.7-$278.8 billion, up from $255.8 billion last year.

“Consumers remain in the driver’s seat, and are resilient despite headwinds of inflation, higher gas prices, stringent credit conditions and elevated interest rates,” says NRF chief economist Jack Kleinhenz. “We expect spending to continue through the end of the year on a range of items and experiences, but at a slower pace. Solid job and wage growth will be contributing factors this holiday season, and consumers will be looking for deals and discounts to stretch their dollars.”

“For all that the consumer has kept the economy afloat, the composition of spending from goods to services will also define holiday sales trends,” Kleinhenz says. “Service spending growth is strong and is growing faster than goods spending. The amount of spending on services is back in line with pre-pandemic trends.”