American consumers may have spent the year under mounting financial pressures, but that didn't stop them from opening up their wallets this holiday season.
According to preliminary insights from Mastercard SpendingPulse, retail sales increased 3.1% year-over-year this holiday season, which runs from November 1 through December 24.
"This holiday season, the consumer showed up, spending in a deliberate manner," Michelle Meyer, chief economist at Mastercard Economics Institute, said in a statement. "The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most."
This year's figure is just shy of Mastercard's predicted 3.7% rise and is much lower than last year's 7.6% increase, most likely due to inflation and higher interest rates, according to Mastercard.
"Retailers started promotions early this season, giving consumers time to hunt for the best deals and promotions," said Steve Sadove, senior advisor for Mastercard. "Ultimately it was about getting the most bang for your buck as consumers spent on a variety of goods and services, resurfacing spending trends from before the pandemic."
According to the data, online retail sales increased 6.3% year-over-year while in-store sales were up 2.2%. Spending online is increasing at a faster pace than in-store, but shopping in-store still makes up a considerably larger portion of total retail spending.
Apparel was one of the top categories for shoppers this season, getting a 2.4% increase in spending over last year. Consumers were also indulging their culinary interests as the restaurant spending was up 7.8% and grocery spending was up 2.1% for the season.
Two categories typically on the top spending list saw decreases this year: jewelry at 2% and electronics at 0.4%.