Twelve Charts of Christmas: A Macro Strategist's Year-End Economic Snapshot

The central question for investors is whether the strong holiday spending now being forecast is durable or fragile. The numbers point to a resilient engine, but one under clear strain from policy uncertainty and rising costs. The National Retail Federation projects retail sales for November and December will grow between over 2024, . This would mark a slight deceleration from last year's 4.3% pace but still represents a powerful consumer pulse. , the second highest in the survey's 23-year history.

This resilience, however, is being tested on multiple fronts. The first sign of strain is in the labor market. Retailers are hiring fewer seasonal workers this year, with projections of new hires. . This pullback signals a more cautious approach to inventory and staffing, likely driven by uncertainty over whether the consumer's spending power can support a full-scale hiring ramp-up. It suggests retailers are bracing for a potentially weaker-than-expected demand surge or are trying to manage costs more aggressively.

The most immediate near-term risk is a political one. A is a notable headwind, with its timing particularly challenging just before the holiday season. Delays in federal spending directly translate to a loss of private-sector income, which further erodes consumer demand. The magnitude of this impact is directly proportional to the shutdown's duration, making it a key variable that could quickly derail the forecast.

In practice, the consumer is navigating a complex trade-off. They are spending record amounts per capita, but they are doing so with an eye toward savings, particularly in nonessential categories. This behavior-seeking value while maintaining overall expenditure-is a hallmark of a consumer who is strong but stretched. The bottom line is that the holiday spending forecast is not a guarantee. It is a projection built on a foundation of consumer resilience that is now being tested by a slowdown in supporting economic activity and a looming policy shock. The durability of the consumer engine hinges on whether these external pressures can be contained.