Americans increased their spending during this year’s holiday season as inflation forced consumers to shell out more for retail products and dining experiences.
U.S. retail sales rose 7.6% in the period from Nov. 1 to Dec. 24, compared to the same period last year, according to the Mastercard Spending Pulse, released Monday. The index tracks in-store and online retail sales, excluding automotive sales, for all payment methods and is not adjusted for inflation.
The report is a welcome sign after a pullback in consumer spending led to a drop in U.S. retail sales in November, despite strong Black Friday attendance. Still, inflation likely explains much of the year-over-year increase in vacation spending.
The personal consumer expenditure price index — the Federal Reserve’s preferred measure of inflation — rose 5.5% in November from a year earlier, the Commerce Department reported Friday.
“Consumers and retailers have managed the season well, showing resilience in the face of mounting economic pressures,” Michelle Meyer, chief North American economist at the Mastercard Economics Institute, said in a statement.
According to Mastercard, consumers diversified their spending to cope with higher prices and prioritized restaurants and other experiences. Restaurant sales increased by more than 15% compared to the same period last year.
U.S. shoppers also showed a growing preference for online shopping, with online sales rising 10.6% year-over-year and e-commerce accounting for 21.6% of total retail sales, up from 20 .9% in 2021.