With just days left before Christmas, the holiday shopping rush is in full swing — and this year, Americans are spending more than many expected. Preliminary data from Visa shows retail spending this holiday season is up 4.2% compared to last year, despite ongoing concerns about inflation and affordability.
Visa analyzed spending over a seven-week period beginning Nov. 1, excluding gasoline, automotive expenses and dining. The data shows that in-store shopping still dominates, accounting for 73% of purchases. Sales at general merchandise stores rose nearly 4%.
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Online purchases made up the remaining 27% of spending. While smaller in share, e-commerce was the main driver of growth, with online sales climbing 7.8% year over year. Visa attributes that jump largely to early-season promotions and convenience.
Why spending held up
Michael Brown, Visa’s principal U.S. economist, told CNBC the resilience of consumer spending has surprised many analysts.
“The underlying surprise here… is that consumer spending is holding up reasonably well in light of softer consumer confidence than we had this time last year and a number of headwinds and concerns about inflation,” he said.
Brown also said more shoppers are turning to artificial intelligence tools to narrow gift choices — often for the first time — helping them shop more efficiently.
What shoppers bought — and skipped
Electronics led the way again, with sales up 5.8%, followed by apparel and accessories, which rose 5.3%.
Spending on furniture, home furnishings, and building materials was largely flat, suggesting consumers prioritized gifts and gadgets over big-ticket home purchases.
As Brown put it, shoppers are “cautious, but they’re also smart about how they’re spending their money.”
Strong spending meets consumer growth
The holiday spending news landed alongside a positive economic update. The Bureau of Economic Analysis reported that U.S. gross domestic product (GDP) grew at a 4.3% biannual rate in the third quarter— the fastest pace in two years.
That marked an acceleration from 3.8% growth in the second quarter and exceeded many economists’ expectations. Consumer spending was a key driver of that growth, along with exports and government spending.
