Holiday season sales are projected to exceed one trillion dollars for the first time

Consumers will spend more than $1 trillion this holiday season, giving generously despite persistent inflation, according to a forecast released Thursday.

The National Retail Federation (NRF) estimated a 4.2% increase in spending, to just over $1 trillion, surpassing last year's 3.1% increase, which totaled $972 billion.

Officials from the trade group pointed to rising fuel prices as a barrier to discretionary spending, especially among low-income households.

But the NRF's chief economist, Mark Mathews, described the labor market as "resilient."

Consumer confidence readings have been weak, but the indicator has not proven to be a reliable predictor of sales, he said.

"We expect households to continue prioritizing spending on family, friends, and loved ones," Mathews told reporters. "We've seen that throughout the year."

The NRF projects that retailers will hire between 325,000 and 375,000 temporary employees this year, a figure comparable to last year's 356,000.

But Mathews described this hiring as lower than in the "more distant past."

He also stated that retailers are unlikely to pass on all of the higher shipping costs resulting from rising diesel prices to consumers.

"I think it's really hard for any retailer to go out there and charge higher prices than everyone else," he said. "So, as we saw with tariffs, this is an industry that survives by offering lower prices to consumers and, potentially, absorbing some of those costs."

The NRF's figures cover sales from November 1 through December 31 and exclude sales from car dealerships, gas stations, and restaurants.