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On Tuesday, October 15th, the National Retail Federation (NRF), the largest retail industry organization in the United States, released a forecast stating that during the holiday shopping season from November to December, American consumer holiday spending will continue to grow, pushing the total holiday sales to a historical high. However, the rate of sales growth will slow down compared to last year.

The NRF defines the "holiday season" as November 1st to December 31st. It is expected that retail sales for these two months will grow by 2.5% to 3.5% year-on-year, lower than the 3.9% growth rate of the same period last year. However, in terms of dollars, the total retail spending for the winter holidays will be between $979.5 billion and $989 billion, exceeding last year's $955.6 billion and setting a new record high.

Among them, online shopping will continue to be the main driver of the overall holiday retail sales growth. Online and other non-store sales are expected to grow by 8% to 9% year-on-year, reaching between $295.1 billion and $297.9 billion, higher than last year's $273.3 billion, but the year-on-year growth rate will slow down compared to last year's 10.7%. This year, American retailers may hire between 400,000 and 500,000 seasonal workers to cope with the increased consumer demand during the year-end holiday season, but the highest range is also lower than last year's seasonal recruitment of 509,000 people.

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The year-end holiday shopping season is important because holiday sales usually account for more than half of the annual revenue of American retailers, and consumer spending is an important pillar of the U.S. economy. Insufficient consumption capacity may lead to pessimistic forecasts for the economy. The 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 described the 2024 holiday retail sales trend as "steady growth," saying that the economic fundamentals remain healthy and will maintain this momentum until 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 the consumption capacity of Americans.

However, the organization's chief economist, Jack Kleinhenz, acknowledged that although family finances are in good shape, providing momentum for strong spending during the holiday season, American family spending will be more cautious. Matthew Shay also said that U.S. interest rates remain high:

"Consumers are indeed considering interest rates and lingering inflation issues, so it is expected that they will pay more attention to prices and be more pragmatic when making consumption decisions."

This year, Americans' purchasing power at the end of the year seems to be less than in previous years, which can be seen in the Thanksgiving shopping in October.

The annual survey conducted by NRF-commissioned retail market research company Prosper Insights & Analytics shows that nearly 8,000 consumers asked about Halloween shopping plans in the first week of September said they would spend an average of about $103.63, which is about $4.62 less than last year's record of $108.24. This may lead to a year-on-year decrease in total Halloween consumer spending to $116 billion this year, breaking away from the historical highest.

The financial blog Zerohedge, known for its sharp tongue, said that this means that some working families are reducing their purchases of Halloween costumes, decorations, and party supplies, and Halloween has always been a popular and highly participated autumn celebration among Americans. Due to high inflation and interest rates, it is expected that mid-to-low-end consumers will reduce these seasonal consumption this year, and the participation rate in various Halloween activities will also slightly decline:The last time Halloween consumer spending decreased year-on-year was in 2020, during the early stages of the pandemic when consumer confidence was severely impacted.

The bleak outlook for Halloween spending may indicate a continued deterioration in the U.S. consumer environment, with further declines expected, serving as an ominous indicator for major shopping events such as "Black Friday" and "Cyber Monday" in late November.

In addition to mainstream industry organizations like NRF, other analysts also believe that American shoppers will be more restrained in their spending during this year's holiday season.

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

Deloitte even anticipates that due to cautious shopping, the growth rate of holiday sales in 2024 will be the lowest in six years (since 2018). Its latest holiday spending forecast released on Tuesday points out that high prices have eroded consumer loyalty to brands, and spending on experiences, decorations, and entertainment will become the driving force for consumer spending this year.

Overall, the slowdown in U.S. holiday shopping spending this year can be considered a historical mean reversion from the exceptionally high growth during the pandemic, returning to the average growth rate of 3.6% from 2010 to 2019. During the COVID-19 pandemic, NRF's holiday season sales in 2020 increased significantly by 9% year-on-year, and in 2021, they soared by 12.4%.

Furthermore, this year's holiday shopping season faces multiple challenges, including a later Thanksgiving, which shortens the shopping season by six days compared to last year, the economic impact of hurricanes Helen and Milton, and the potential temporary suppression of consumer behavior by the U.S. presidential election in November. There is also analysis pointing out that although U.S. retail gasoline prices are lower than last year, many food prices are much higher than a few years ago, both of which dampen consumer enthusiasm.

Financial blog Zerohedge also found that the U.S. personal savings rate plummeted from over 5% to 2.9% within a year, the lowest level since the bankruptcy of Lehman Brothers. As the excess savings from the pandemic disappear, many Americans are choosing to rely on credit card debt to support their spending:

"Consumers from all income levels have been hit by the decline in personal savings, implying a bleak outlook."