U.S. consumers showed resilience during the holiday season, driving retail spending up 4.2% year-over-year, according to preliminary data released Tuesday by Visa.
The report from Visa Consulting and Analytics indicates that despite continued economic difficulties, buyers continue to spend, particularly on technology and personal goods.
The results tracked payments activity over a seven-week period beginning November 1 using a subset of data from the Visa payment network in the United States and cover major retail categories, excluding spending on auto, gas and dining. The figures are also not adjusted for inflation.
In-store purchases accounted for the majority of holiday spending, capturing 73% of total retail payment volume during the period, while online purchases accounted for the remaining 27%.
However, e-commerce was the main driver of growth, with online sales up 7.8% compared to last year, reflecting continued demand for convenient products and early season promotions.
“The underlying surprise here … is that consumer spending is holding up reasonably well in light of lower consumer confidence than this time last year and a number of headwinds and inflation concerns,” Michael Brown, senior U.S. economist at Visa, told CNBC.
Brown noted that the 2025 holiday season marked a distinct shift in consumer behavior, citing the growing influence of artificial intelligence on how shoppers find products and compare prices.
“We’re seeing consumers use AI in a big way to compare purchases and then help them find the perfect gift,” Brown said. “This is the first holiday shopping period in which about half of consumers in this survey responded that they would leverage AI for one of two tasks.”
The breakdown of spending categories highlights a shift toward personal goods and convenience, and less toward home improvement projects.
Electronics became the best performing category of the season, with sales up 5.8%. Visa attributed the jump to a refresh cycle driven by “high-performance devices in the age of AI.”
Clothing and accessories also posted strong numbers, up 5.3%. General merchandise stores – retailers that offer a “one-stop” experience – saw a 3.7% increase.
Conversely, the home improvement industry struggled during the holidays. Spending on building materials and gardening equipment fell 1%, suggesting consumers prioritized gifts and gadgets over home maintenance at the end of the year.
Furniture and furnishings remained essentially flat, recording a gain of 0.8%.
While the overall figure is positive for the retail sector, the lack of adjustment for inflation means that ‘real’ volume growth is likely to be more modest depending on final Consumer Price Index readings for the period.
Currently, Brown said, real spending growth, adjusted for inflation, is still up about 2.2% this season.
“It’s not too bad, considering a lot of uncertainty this year,” Brown said. “The consumer is uncertain, he is cautious, but he also knows how he spends his money.”
Visa’s numbers also indicate a disconnect between sentiment and action this season.
According to the CNBC All-America Economic Survey released last week, 41% of Americans said they plan to spend less on the holidays this year, up 6 points from a year ago.
The CNBC investigation found that the high cost of goods emerged as a major factor in determining how much shoppers spend and where they spend, suggesting that years-long inflation and rising prices of imported goods due to tariffs are being felt at the checkout.