Higher prices make up about half of the NRF's 4.2% holiday spending forecast
The National Retail Federation forecasts $1.01 trillion in November and December holiday spending, up 4.2% with no adjustment for inflation. Forecasters including the NRF and Mastercard put about half the gain on prices, so implied unit growth is nearer 2%.
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Key figures: a 4.2% gain on last year's $972 billion in holiday sales is about $41 billion. If prices account for about half of the growth, roughly $20 billion of it is price, and implied volume growth is about 2.1%.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Gain of 4.2% on last year's $972 billion, about | $41 billion | 17 | |
| Gain from price, roughly | $20 billion | 18 | |
| Implied volume growth | 2.1% about | 19 |
What happened
- Retailers rang up $972 billion in holiday sales last year, 3.1% more than the year before, the trade group said.
- NRF chief economist Mark Mathews said the 4.2% projection is above the actual gains of the last 20 years, which averaged 3.1% excluding 2020 and 2021.
- Mastercard's Economics Institute forecasts 5.5% growth for Nov. 1 through Dec. 24, measured across all payment methods including cash.
- Regular gasoline averaged $4.33 a gallon on Thursday, according to AAA, against less than $3 before the war with Iran began.
Why it matters
- Who has to decide decision Buyers must pick a planning base before the season. Ordering to 4.2% risks markdowns if units track the implied 2.1%, and ordering to 2.1% risks stockouts if shoppers keep spending as Mastercard expects.
- Who's exposed exposure Retailers whose customers skew lower-income carry the gasoline squeeze, and a national total lifted by higher-income shoppers will not show it.
- What doesn't add up contradiction Monthly surveys show dismal consumer confidence while the forecasts assume continued spending. The forecasts rest on a job market that Mastercard's economist says is giving shoppers a sense of security.
The forecast was not adjusted for inflation [2], so its dollars carry price and volume together. Applied to last year's base, 4.2% is a gain of about $41 billion [17]. The NRF and other forecasters said they expect higher consumer prices to account for about half of the anticipated growth [3]. On that split, roughly $20 billion of the gain is price [18] and implied volume growth is about 2.1% [19].
Mastercard's institute applies the same split to its higher forecast, which works out to about 2.75 points of price [20]. The windows differ, so the totals are not interchangeable: the NRF counts November and December [1], and Mastercard counts Nov. 1 through Dec. 24 [6]. AlixPartners counts October through December and expects growth of 4% to 7% [14].
Half of the growth is still volume, and Mastercard still expects healthy spending because of a decent job market, according to its chief economist, Michelle Meyer [7]. "I guess they feel some sense of security because the jobless numbers are so low," she said [8].
The case for taking the headline at face value is consumer resilience. AlixPartners partner Bryan Eshelman said: "We've seen disruption after disruption kind of knock people off kilter, and then the consumer comes roaring back" [13]. Eshelman was describing earlier seasons, and this one is being forecast during a war with Iran that has pushed up gasoline prices and made transporting goods costlier for retailers through high diesel prices [10].
The mix of shoppers matters as much as the total. The AP report expects higher pump prices to keep squeezing lower-income shoppers, while higher-income shoppers, buoyed by stock market gains, keep splurging on discretionary purchases [11]. The report does not break spending out by income. Eshelman said consumers are trading down to lower-price brands and stores and shopping earlier [12]. We would expect trading down to push units toward cheaper goods and earlier shopping to move some sales ahead of a November-December window, and neither is added demand in the NRF's figure.
Holiday spending is 19% of the retail industry's annual sales, according to the NRF [15]. Eshelman also said consumers are relying more on credit cards and buy now, pay later plans [12], so part of the season's spending is repaid in the new year, after the NRF's window has closed.
What to watch
- Whether regular gasoline stays near $4.33 a gallon or moves back toward the sub-$3 level from before the war with Iran.
- Whether the jobless numbers that Mastercard's Michelle Meyer cites as the basis for shopper security keep holding.
- Whether October sales, which AlixPartners counts and the NRF's November-December window does not, show shoppers moving purchases earlier.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence55
- Adoption
- Insufficient
- Hype gap+15
- Incentives
- Insufficient
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
The NRF expects American consumers to spend $1.01 trillion in November and December, 4.2% more than during the same months last year.
- [2]
The NRF forecast was not adjusted for inflation.
- [3]
The NRF and other organizations that have issued holiday forecasts said they expected higher consumer prices to account for about half of the anticipated growth.
- [4]
Retailers rang up $972 billion in holiday sales last year, 3.1% more than the year before that.
- [5]
The NRF's 4.2% growth projection is above the actual gains of the last 20 years, which averaged 3.1% when excluding the outsized holiday spending of 2020 and 2021.
- [6]
The Mastercard Economics Institute, which tracks spending across all payment methods including cash, forecast a 5.5% increase in holiday sales from Nov. 1 through Dec. 24 compared to last year.
- [7]
Mastercard estimated that half of the growth would come from higher prices instead of more sales, but still expects healthy spending because of a decent U.S. job market, Meyer said.
- [8]
"I guess they feel some sense of security because the jobless numbers are so low," Meyer said.
- [9]
The average price for regular gasoline rose to $4.33 per gallon Thursday, according to AAA; before the war began, gas cost less than $3 a gallon.
- [10]
The U.S. war with Iran has driven up gasoline prices for drivers, and high diesel prices make transporting goods costlier for retailers.
- [11]
Experts say higher pump prices will continue to squeeze lower-income shoppers, while higher-income shoppers buoyed by stock market gains will keep splurging on discretionary purchases.
- [12]
Consumers are trading down to lower-price brands and stores, shopping earlier and relying more on credit cards and buy now pay later plans, Eshelman said.
- [13]
"We've seen disruption after disruption kind of knock people off kilter, and then the consumer comes roaring back," Eshelman said.
- [14]
AlixPartners expects holiday sales for October, November and December to expand 4% to 7% over the same three months last year.
- [15]
Holiday spending accounts for 19% of the U.S. retail industry's annual sales.
- [16]
The holiday outlooks illustrate an ongoing disconnect between the dismal consumer confidence that shows up in monthly surveys and Americans' willingness to keep spending.
- [17]
A 4.2% gain on last year's $972 billion in holiday sales is about $41 billion.
- [18]
If prices account for about half of the growth, roughly $20 billion of the gain is price.
- [19]
If prices account for about half of the 4.2% growth, implied volume growth is about 2.1%.
- [20]
Half of Mastercard's 5.5% forecast growth is about 2.75 percentage points of price.
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Sources
1 independent publisher whose own reporting we read for this story.
- abcnews.comUS retail trade group forecasts healthy holiday sales, in part due to inflation
1 article · October 15, 2026
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Topics
- Holiday retail spendingFollow
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