Unwaning US Consumer Spending... Year-End Shopping Sales Increase by 3.8%

Mastercard Report
Last Year's Growth Rate Exceeded 3.1%

A survey revealed that consumer spending during the year-end shopping season in the United States, from this year’s Thanksgiving through Christmas, increased by nearly 4%. Despite the cumulative effects of intense tightening, strong consumption is supporting the steady growth of the U.S. economy.

Yonhap News

According to the Mastercard SpendingPulse report on the 26th (local time), U.S. retail sales excluding automobiles from November 1 to December 24 increased by 3.8% compared to the same period last year. This surpasses not only last year’s growth rate (3.1%) but also Mastercard SpendingPulse’s forecast (3.2%).

Michelle Meyer, Chief Economist at Mastercard Economics Institute, said, “The robust spending this holiday season reflects the strong consumption that U.S. consumers have demonstrated throughout the year.”

By category, restaurant spending increased by 6.3% compared to last year. Jewelry rose by 4% during the same period, while electronics and apparel showed growth rates of 3.7% and 3.6%, respectively. By purchasing behavior, online purchases surged 6.7% compared to the same period a year ago. In contrast, offline purchases increased by only 2.9%. However, Mastercard explained that purchasing behavior focused on discounted products was also prominent.

Chief Economist Meyer explained, “Consumers have both the willingness and ability to spend during the year-end shopping season, but as seen in the concentration of online spending during the biggest discount periods, they are consuming with a focus on value.”

Since consumption accounts for three-quarters of U.S. economic activity, the increase in retail sales during the year-end shopping season is interpreted as a signal that can gauge the future direction of the U.S. economy. Although some concerns have been raised that the cumulative intense tightening and labor market slowdown could lead to a recession, the U.S. economy continues to show stronger-than-expected growth based on robust consumption. According to the U.S. Bureau of Economic Analysis (BEA), the final figure for third-quarter real Gross Domestic Product (GDP) grew at an annualized rate of 3.1% quarter-on-quarter. This not only greatly exceeds the U.S. potential growth rate, estimated to be in the high 1% range, but also surpasses the previously announced advance and preliminary estimates (both 2.8%). Consumption was also a major driving force. Personal consumption expenditures in the third quarter increased by 3.7% quarter-on-quarter, marking the largest increase since early 2023.