This archive report was first published on 26 December 2019.
As the US economy navigates a trade war and uncertain outlook, one constant remains: Americans' willingness to spend. According to a recent survey by Mastercard SpendingPulse, holiday sales rose 3.4% this year over 2018, with online sales growing even more sharply at 18.8%.
While the increase is smaller than last year's, retailers will welcome the news as they rely on year-end splurges to drive their annual sales. Consumers are responsible for the largest chunk of economic activity in the US, and their spending has offset declining business investment.
The economy grew at a 2.1% annual rate in the third quarter of 2019 and has been expanding for 11 years, one of the longest periods of continuous growth ever. Employers added 266,000 jobs in November, and unemployment remained at 3.5%, the 21st consecutive month with an unemployment rate of 4% or lower.
Helped by the Federal Reserve's decision to ease up on interest-rate increases, stocks are on pace for one of their best years in decades. The S&P 500 index was up nearly 29% in 2019 before markets opened on Thursday.
Mastercard's SpendingPulse survey tracked sales from November 1 through December 24, including estimates of purchases made with cash and other kinds of payments. Automobile sales were excluded.
Apparel sales gained 1% over last year and 17% online, while spending on jewelry went up 1.8% overall and 8.8% online. Sales of electronics and appliances rose 4.6%, and home furniture and furnishings grew 1.3%.
The shift to online shopping has come at the expense of brick-and-mortar stores, with the retail industry announcing over 9,000 store closings in 2019. Department stores, hit particularly hard by the transformation, saw a 1.8% decline in sales and only 6.9% growth in online sales.
