Holiday Spending Forecast to Grow Only Slightly

Retail group estimates that Americans on average will spend $750 on holiday trappings this year.

Brandon Cramer, 4, sits with Santa Claus, portrayed by Bob Penn, at the Fashion Show Mall in Las Vegas on Tuesday, Dec. 7, 2004. Penn's naturally grey hair and beard keep him in high demand this time of year. Penn will work everyday from now until Christmas Eve at the mall.
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American shoppers will spend just under $750 on average on their holiday purchases this year, with a record percentage of shoppers buying online, according to new estimates from the National Retail Federation. That figure is up only slightly from the nearly $741 spent last year and down slightly when inflation is taken into account.

The estimate comes from the federation's holiday consumer spending survey and takes into account not only the amount that shoppers plan to spend on gifts, but also other trappings, like decorations, cards, food, and candy. Though some recent retail and consumer spending reports have shown encouraging growth, the federation's estimate suggests that American shoppers remain cautious in the slow recovery.

Still, the federation views the numbers in a positive light.

"We've seen this pattern of cautious optimism all year and despite the challenges that still exist in our economy, it looks as if consumers are eager to celebrate with friends and family," said federation President and CEO Matthew Shay in a statement accompanying the data.

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In terms of nominal dollars, Americans' holiday spending has nearly rebounded to its most recent high. In 2007, the peak before the downturn took hold, Americans spent an average of just over $755 on holiday shopping. When adjusted for shifting prices using the consumer price index, the discrepancy is wider. In 2007, for example, inflation-adjusted NRF data show that in 2012 dollars American holiday shoppers spent over $840 on average during the holiday season. In 2004 (the earliest year of data provided) through 2006, the inflation-adjusted averages topped $850, compared to this year's nearly $750.

Though Americans' holiday spending may be sluggish, the NRF's latest survey suggests that they are less constrained by a bad economy than last year. Just over 52 percent said this year that the state of the economy would affect their holiday spending plans, down nearly 10 points from last year.

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There are other bright spots, too. Online sellers can expect more traffic this year, with 51.8 percent of the population — a survey record — saying they will shop online this season.

Consumers are also projected to make a few more selfish purchases. Fifty-nine percent of respondents say that they will take advantage of holiday sales to make non-gift purchases for themselves and their families. Taken together, American shoppers expect to spend nearly $140 on these purchases — a record figure for the survey (in nominal terms).

Still, the NRF survey shows one thing that even the Great Recession couldn't change: Americans like to buy their gifts early. Roughly 22 percent of Americans say they start their holiday shopping in October, 7 percent say they start in September, and 12.3 say that their shopping begins even before that. That's slightly more early shoppers than last year. In addition, Americans have gotten better about procrastination. In 2004, 5.6 percent of respondents said they started shopping in the last two weeks of December. Though the number has fluctuated from year to year, that figure is at 3.5 percent this year, down considerably from 2004 and also down 0.6 percentage points from 2011.

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Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter @titonka or via E-mail at dkurtzleben@usnews.com.