Tariffs and inflation reshape year-end shopping

Consumers step up holiday gift giving, but economic uncertainty represses behavior.

- BY ANNE D'INNOCENZIO

LAST-MINUTE shoppers brave the rain on Christmas Eve at the Citadel Outlets.

(GARY CORONADO For The Times)

Consumers stepped up gift-giving during the first seven weeks of the holiday shopping season, according to new data released this week. But uncertainty about the economy is making shoppers more targeted in their buying.

From Nov. 1 through Sunday, cash and credit card sales rose 4.2%, which is less than the 4.8% increase during the same period a year ago, according to Visa’s Consulting & Analytics division.

The data, which exclude sales from auto dealerships, gas stations and restaurants, are not adjusted for inflation or the impact from President Trump’s tariffs.

When adjusted for inflation, retail sales rose a more modest 2.2% for the first seven weeks of the holiday period, according to Visa’s U.S. principal economist Michael Brown. That compares with the inflation-adjusted 3% in the same year-ago time frame.

“It’s certainly not a spectacular season,” Brown told the Associated Press. “It’s sort of an average holiday season given concerns about macroeconomic growth, inflation. There is still a lot of uncertainty among the consumer population.”

Mastercard Spending Pulse, which also tracks cash and credit card spending, said that sales rose 3.9% from Nov. 1 through Sunday. That’s above its 3.6% forecast for the overall season, but also lower than last year’s 4.1% increase during the same period.

Shoppers “blended online and in-store shopping to find the best deals and maximize convenience,” said Michelle Meyer, chief economist at Mastercard Economics Institute.