Holiday sales up 7.6% despite the squeeze of inflation

NEW YORK (AP) — Holiday sales rose this as American spending remained resilient during the critical shopping season despite surging prices on everything from food to rent, according to one measure.

Holiday sales rose 7.6, a slower pace than the 8.5% increase from a year earlier when shoppers began spending the money they had saved during the early part of the pandemic, according to Mastercard SpendingPulse, which tracks all kinds of payments including cash and debit cards.

Mastercard SpendingPulse had expected a 7.1% increase. The data released Monday excludes the automotive industry and is not adjusted for inflation, which has eased somewhat but remains painfully high.

U.S. sales between Nov. 1 and Dec. 24, a period that is critical for retailers, were fueled by spending at restaurants and on clothing.

By category, clothing rose 4.4%, while jewelry and electronics dipped roughly 5%. Online sales jumped 10.6% from a year ago and in-person spending rose 6.8%. Department stores registered a modest 1% increase over 2021.

“This holiday retail season looked different than years past,” Steve Sadove, the former CEO and chairman at Saks and a senior advisor for Mastercard, said in a prepared statement. “Retailers discounted heavily, but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic.”

Some of the increase reflected the impact of higher prices across the board.

Consumer spending accounts for nearly 70% of U.S. economic activity, and Americans have remained resilient ever since inflation first spiked almost 18 months ago. Cracks have begun to show, however, as higher prices for basic necessities take up an increasingly large share of everyone's take-home pay.

Inflation has retreated...