Holiday Spending Defies Gloom as US Retail Sales Climb 4 Percent

Preliminary figures released Tuesday by Visa and Mastercard show Americans continuing to open their wallets through late December, prioritizing electronics and wardrobe updates.

US retailers are closing the holiday season on firmer ground than expected, with sales rising about 4 percent so far as shoppers found ways to spend despite tighter household budgets and lingering economic anxiety.

Preliminary figures released Tuesday by Visa and Mastercard show Americans continuing to open their wallets through late December, prioritizing electronics and wardrobe updates while hunting aggressively for deals. The data suggests that fears of a subdued holiday season, fueled by weak consumer confidence and tariff-driven inflation concerns, did not fully materialize.

Here’s the thing. Shoppers did not abandon caution. They simply adapted. Visa’s chief economist, Wayne Best, said consumers were more deliberate, frequently using artificial intelligence tools to discover and compare prices so they could stretch discretionary spending. Mastercard Economics Institute chief economist Michelle Meyer echoed that view, noting that many consumers shopped earlier than usual and leaned heavily on promotions to lock in savings.

Retailers anticipated this behavior. Many rolled out discounts weeks ahead of Thanksgiving, aiming to secure demand early in a season clouded by uncertainty. That strategy appeared to work. Sales during Cyber Week, the five-day stretch spanning Thanksgiving and Black Friday, showed consumers largely brushing aside economic worries.

According to Visa, total US retail spending excluding autos, gasoline, and restaurants rose 4.2 percent between November 1 and December 21. That figure came in slightly below the company’s earlier forecast of 4.6 percent growth for the full two-month period. Mastercard, which tracks both retail and food service establishments, reported a 3.9 percent year-on-year increase over the same period, beating its prior projection of 3.6 percent. Neither dataset was adjusted for inflation.

What this really means is that spending momentum carried deeper into December than many had expected. Online shopping continued to outperform physical stores, helped by early promotions and the ease of buying from home. Still, brick-and-mortar retail remained dominant, accounting for 73 percent of transactions in Visa’s data, compared with 27 percent online.

Electronics led the way, with spending on items like televisions and smartphones rising 5.8 percent, followed by clothing and accessories at 5.3 percent. Mastercard added that colder weather and seasonal discounts drove wardrobe refreshes, while jewelry also attracted more buyers this year.

Taken together, the numbers point to a consumer who is cautious, calculating, and still willing to spend when the value feels right.