Core Insights - The Mastercard Economics Institute anticipates a slower growth rate in holiday spending compared to the previous year due to labor market hiring slowdowns and tariff uncertainties [1][3] - Retail sales excluding autos are projected to grow by 3.6% year-over-year during the holiday shopping season, a decrease from the 4.1% increase recorded in 2024 [2] - E-commerce sales are expected to rise by 7.9% year-over-year, while in-store sales will increase by 2.3% year-over-year [4] Labor Market and Consumer Behavior - Consumers are expected to seek value amid economic uncertainty, influenced by labor market health and tariff-related price increases [3] - The labor market is characterized by a slowdown in hiring, but a low firing rate is helping to support consumer spending [3] - Wage growth is moderating for lower-paid workers, while high-income workers benefit from stock market gains [4] Consumer Spending Expectations - Deloitte forecasts a retail sales increase of 2.9% to 3.4% for the holiday season, down from a 4.2% increase in 2024 [5] - Bankrate's report indicates that 43% of holiday shoppers plan to spend the same as last year, 30% expect to spend less, and 27% anticipate spending more [6] - PwC's Holiday Outlook suggests a 5% decline in holiday spending, marking the first drop since 2020, with 84% of consumers planning to cut back due to rising prices and higher living costs [7]