Americans’ holiday spending looks set to hit a record milestone this year despite an ongoing cost-of-living crisis.
Holiday sales will surpass $1 trillion for the first time, according to a 2026 holiday shopping outlook by management consulting firm Bain & Company last week.
“While US retailers have reason to rejoice this holiday season as the industry reaches the trillion-dollar milestone for the first time, there are underlying factors that will temper bottom lines,” Bain’s global head of retail, Aaron Cheris, said.
This season’s sales figures are projected to be 4.5 percent higher than last year, the report noted.
The prospect of a record-breaking holiday sales season comes as retailers struggle through an up-and-down year marked by periods of high inflation.
Since it started in late February, President Donald Trump’s war with Iran pushed gas prices up to their highest point in four years in March. The conflict’s impact on energy prices played a critical role in pushing inflation to 4.2 percent in May - a three-year high.
Between January and July, retail sales have fallen month-on-month three separate times: February, April and July, according to Census Bureau data. Sales were up from April to June, likely driven by consumers tapping into their tax refunds to supplement spending.
July’s 0.6 percent drop in sales was the biggest decline since May 2025, and possibly fueled by consumers pulling back on purchases after World Cup and Amazon Prime Day spending.
Though consumer spending has been up three of the past four months, weakness may be forming below the surface.
“Cracks are emerging as consumers dip into savings and shift spending toward essentials and away from discretionary purchases,” research firm IBISWorld wrote in an August analysis of the U.S. economy.
However, a break from the tight financial times could be on its way. Early indicators signal that the economy’s inflation rate could continue its decline from May’s high, Federal Reserve Governor said in an interview with Reuters last week.
With additional reporting from the Associated Press
Read MoreIt’s getting harder to return unwanted online purchases. And Americans are frustrated
Amazon Prime members just got a huge new perk —here’s how to use it
Soaring $40 trillion national debt and Iran deadlock shattering Trump’s fiscal claims
