Consumers are expected to spend more this holiday season

Ready for some holiday shopping? The average consumer is expected to buy more this year.

An early holiday shopping report is forecasting a moderate increase in retail sales, as consumers continue to deal with inflation.

In the first Deloitte 2024 Holiday Forecast, Deloitte, an audit, consulting, tax and advisory services firm, said holiday retail sales are likely to increase between 2.3% and 3.3% this year.

Holiday sales predicted to return to pre-pandemic levels

Analysts with Deloitte said sales growth is expected to return to pre-pandemic levels in line with trends over the past decade. Holiday sales, particularly in e-commerce, saw a sharp surge after the pandemic, Deloitte said.

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"This year we expect slower growth than last year, with a return to more normal growth patterns post-pandemic," Akrur Barua, an economist for Deloitte Insights, told USA TODAY. "Sales are likely to increase between 2.3% and 3.3% this season versus the 4.3.% increase from the 2023-2024 season.

"Though disposable personal income has been growing steadily this year, it is growing at a slower pace than the 2023-2024 season. The end to pandemic-era savings will also weigh on consumer spending growth. And so will high-credit card debt as they approach the holiday season," Barua said.

Deloitte is projecting overall holiday sales totaling $1.58 to $1.59 trillion during the November to January timeframe. Retail sales between November 2023 and January 2024 (seasonally adjusted and excluding automotive and gasoline) grew 4.3% and totaled $1.49 trillion, according to the U.S. Census Bureau.

Additionally, Deloitte is forecasting that e-commerce sales will grow between 7.0% to 9.0% year-over-year, totaling between $289 billion to $294 billion this season. That's compared to 10.1% growth last year with a $252 billion total.

Consumers are looking for deals

Consumers will continue to take advantage of online deals to maximize their spending, Michael Jeschke, principal of Deloitte Consulting LLP, said in a press release.

"While this holiday season reflects a return to trend levels of growth, retailers who focus on building loyalty and trust with consumers could be well positioned for success," Jeschke said in the release.

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Steady growth in disposable personal income and a steady labor market "are both tailwinds that will support retail sales this season. While declining inflation will weigh on the nominal value of retail sales, we expect that it will boost consumers’ purchasing power through growth in real wages, driving an increase in sales volumes," Barua said.

Holiday retail sales growth of 2.3% to 3.3% "is healthy in the wider context of an economy trending toward stable, long-term growth. The labor market is still healthy, household debt relative to disposable personal income is relatively low, and the total value of financial assets of households have gone up by 30% since the last quarter of 2019. These should be enough to support steady retail sales growth in the upcoming holiday season,” Barua said.

The holiday shopping season has already begun, with nearly half – or 48% – of respondents to a recent Bankrate survey, saying that they were going to begin checking gifts off their list by October.

Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at [email protected] or follow her on X, Facebook, or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.