The American Financial Services Association (AFSA) announced in its newsletter that a new report from the National Retail Federation (NRF) indicates Americans continue to spend aggressively, despite historically low economic sentiment.
According to the NRF's CNBC/NRF Retail Monitor, U.S. core retail sales—excluding restaurants, autos, and gas—rose by 0.6% month over month and 4.89% year over year in October. This follows a 0.49% monthly decline in September. The NRF said that the rebound reflects "strong momentum" heading into the holiday season, emphasizing that consumers remain willing to spend even as they face inflation, higher interest rates, and broader economic uncertainty.
On the same NRF call, analysts noted that Americans have given current economic conditions their harshest rating on record in the University of Michigan’s long-running sentiment survey. Despite this pessimism, spending continues to hold up. This disconnect between record pessimism and continued consumption has become a defining post-pandemic pattern, complicating efforts to assess the true health of households.
Looking ahead to the holidays, the NRF forecasts that U.S. retail sales in November and December 2025 will grow between 3.7% and 4.2% over 2024 levels, reaching between $1.01 trillion and $1.02 trillion in total. The trade group asserts that American consumers remain "fundamentally strong," continuing to drive economic activity even as they search for savings and make trade-offs in nonessential categories.
Founded in 1916, AFSA is the primary U.S. trade association for the consumer credit industry, representing a broad membership that includes consumer and commercial finance companies, vehicle finance and leasing firms, mortgage lenders, and credit card issuers. AFSA's mission is to promote safe, ethical lending and protect consumers' access to credit.
