Dec. 23 (UPI) — U.S. consumers showed steady confidence this holiday season, with retail spending up 4.2% from last year, according to preliminary data via Visa released Tuesday.
Despite ongoing economic challenges, shoppers continued to buy especially tech and personal items. The analysis — based on Visa payments data from Nov. 1 over a seven‑week period — excluded auto, gas and restaurant categories and wasn’t adjusted for inflation.
Michael Brown, principal U.S. economist at Visa, said the “underlying surprise” was that U.S. consumer spending “is holding up reasonably well in light of softer consumer confidence than we had this time last year and a number of headwinds and concerns about inflation.”
In-store purchases made up 73% of total spending, though online sales rose by 7.8% and were the main source of growth fueled by convenience and early holiday deals.
Brown said the 2025 holiday season signaled a clear change in shopping habits, driven in part by artificial intelligence reshaping how consumers discover products and compare prices.
“We are seeing consumers use AI in a big way in comparison shopping and then helping to narrow down that perfect gift,” Brown told CNBC.
Electronics saw the strongest gains, with sales up 5.8%, driven by demand for newer, high-powered devices linked to the AI boom.
Apparel and other accessories rose 5.3% and general merchandise retailers offering one-stop shopping recorded a 3.7% increase.
But home-focused categories lagged. Spending on building materials and garden supplies slipped 1% and furniture and home furnishings were nearly flat edging up just 0.8%.
Although overall retail growth appears solid, the figures are not adjusted for inflation, meaning actual inflation‑adjusted gains were likely smaller once Consumer Price Index data was fully factored in.
Meanwhile, a recent survey found that 41% of Americans intended to cut back on holiday spending this year, which was up six points from 2024.
“This is the first holiday shopping season where roughly half of the consumers in that survey responded that they are going to leverage AI for one of those two tasks,” Brown added.
