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Cautious shoppers step up spending to start holiday season

NEW YORK (AP) — Consumers stepped up gift giving during the first seven weeks of the holiday shopping season, according to new data released Tuesday. But uncertainty about the economy is making shoppers more targeted in their buying.

From Nov. 1 through Sunday, cash and credit card sales rose 4.2%, which is less than the 4.8% increase during the same period a year ago, according to Visa’s Consulting & Analytics division.

The data, which exclude sales from auto dealerships, gas stations and restaurants, are not adjusted for inflation or the impact from President Donald Trump’s tariffs.

When adjusted for inflation, retail sales rose a more modest 2.2% for the first seven weeks of the holiday period, according to Visa’s U.S. principal economist Michael Brown. That compares with the inflation-adjusted 3% in the same year-ago time frame.

“It’s certainly not a spectacular season,” Brown told The Associated Press. “It’s sort of an average holiday season given concerns about macro economic growth, inflation. There’s still a lot of uncertainty among the consumer population.”

Mastercard SpendingPulse, which also tracks cash and credit card spending, said that sales rose 3.9% from Nov. 1 through Sunday. That’s above its 3.6% forecast for the overall season, but also lower than last year’s 4.1% increase during the same period.

Shoppers “blended online and in-store shopping to find the best deals and maximize convenience,” said Michelle Meyer, chief economist at Mastercard Economics Institute.

The figure, not adjusted for inflation, excludes sales from automotive dealerships and gas stations, but includes business from restaurants. Mastercard SpendingPulse didn’t have an inflation-adjusted figure available.

Retailers say customers are being selective and focused this year on gifts while holding off on the usual holiday decor spending. Many households are struggling with higher prices for groceries, rent and imported goods hit by tariffs. The latest job report, released by the Labor Department last week, also shows a souring employment picture.

As a result, consumers have been more gloomy. Consumers’ confidence in the economy fell in December, marking the fifth straight monthly decline as Americans grew anxious about high prices and the impact of Trump’s sweeping tariffs, according to the latest reading from The Conference Board.

Even with those anxieties, shoppers remain resilient. When all the numbers are in, Visa expects holiday sales data will be more or less in line with its prediction of a 4.6% sales increase between November and December.

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