Economic Impact of American Businesses During the Holidays

Nicholas Molinari
Associate Manager, Tax and Economic Policy, U.S. Chamber of Commerce

Published

December 19, 2024

The holiday season is a time of joy, tradition, and community. From bustling shopping centers to seamless online experiences, businesses are fostering the spirit of the season while driving significant contributions to the economy.

Here’s a look at how innovation, creativity, and consumer enthusiasm are shaping this year’s festivities.

According to the National Retail Federation (NRF), holiday spending in 2024 is forecasted to grow between 2.5% and 3.5% over 2023, reaching $979.5 billion to $989 billion.

This steady growth aligns with the yearlong retail trend and positive outlook of American consumers, with sales increasing consistently month over month.

Shoppers plan to spend an average of $902, with $641 allocated to gifts for family, friends, and colleagues, up from $620 in 2023.

E-commerce continues to lead the charge, with the NRF expecting online and non-store sales to grow by a massive 8 to 9%. Digital platforms are now pivotal, combining convenience and personalized experiences that resonate with modern consumers and the sentimental nature of the holiday season.

Jobs and Economic Impact

The holiday season provides a significant boost to the U.S. labor market. The NRF estimates that retailers are expected to hire between 400,000 and 500,000 seasonal workers to meet growing demand.

These jobs not only support the busy shopping season but also provide opportunities for individuals to earn additional income during the holidays and broaden their professional development and experience.

As the nation’s largest private-sector employer, the retail industry supports more than one in four U.S. jobs and contributes $5.3 trillion annually to the economy. Ernst & Young estimates holiday sales to surpass $1 trillion, setting a record high as communities throughout the country spend and engage in gift-giving.

The holiday season underscores retail’s importance, with its effects rippling through local communities, American households, and beyond.

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Shopping Trends, Holiday Traditions

Brick-and-mortar stores are finding new ways to adapt to the holiday market in a digital-first world. The NRF expects 57% of shoppers plan to make online purchases, but in-person experiences remain a critical component of holiday shopping.

According to Bank of America’s 2024 Holiday Shopping Season report, nearly 60% of consumers will visit stores to enjoy festive displays, exclusive in-store deals, and the joy of being surrounded by that special holiday feeling. The report also notes that early purchasing continues to be a consumer trend in 2024, estimating that 49% of shoppers had planned to finish their holiday shopping on Cyber Monday, Black Friday, or even earlier.

Black Friday and Cyber Monday continue to dominate the holiday season, drawing millions of consumers in stores and online. According to NRF, Black Friday attracted 81.7 million in-store shoppers this year, while 87.3 million turned to online platforms. 63% of shoppers used mobile devices to find the best deals on Cyber Monday this year. The KS&R holiday survey found that 34% of respondents indicate they plan to shop more online this holiday season, compared with 12% who indicate they will shop more in-store.

In response to the digitalization of the consumer experience, retailers are leveraging technology to enhance these experiences and respond to consumer preferences. PwC reports that 72% of Gen Z consumers say it’s important to have self-checkout technology in-store when doing their holiday shopping, and nearly all in-person retailers are modernizing to provide this feature.

This consumer shift underscores the importance of digital platforms and infrastructure that can serve up meaningful offers, guide customers through the buying journey, and provide standout service.

Younger generations are also shaping new trends, such as shopping for thrifted or refurbished gifts, reflecting a growing interest in sustainability. PwC reports a whopping 40% of Gen Z consumers citing celebrity and influencer endorsements as an important factor when holiday shopping.

What’s on wish lists this holiday season? Gift cards, clothing, and personal care items remain top picks for many younger shoppers, catering to a wide array of tastes and budgets.

Holiday Cheer Beyond Shopping

While gifts and decorations are central to the season, Americans are also investing in experiences.

Entertainment, travel, and gatherings with family and friends are taking center stage. This year, 41% of consumers plan to travel, with Gen Z leading the charge as the most likely generation to vacation during the 2024 holiday season at 68%.

Food, hosting, and festivities remain staples, with $261 of the average holiday budget dedicated to seasonal items like decorations, candy, and greeting cards. Together, these elements make the holidays a celebration of togetherness and tradition.

Bottom Line

American businesses are integral to the holiday season, contributing time, energy, and resources to help Americans create memorable holiday experiences while driving economic growth in communities across the country. No matter how you celebrate the holidays, American business is here to make the season merry, bright, and full of light.