Total spending for the holiday period, from Nov. 1 through Dec. 24, rose 3.8 percent, according to data released Thursday by Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. That's above Mastercard SpendingPulse's estimate of 3.2 percent for this year and more than last year, when growth was 3.1 percent.
Online sales stood out, rising 6.7 percent compared with a gain of about 2.9 percent for in-store sales. The data is not adjusted for inflation.
Spending is a perennial measure of consumer health: Inflation, nervousness about the job market and even a contentious outcome to the presidential election each could have hampered sales. But after a year of restraining themselves, shoppers instead decided to take advantage of the discounts. The last five days of the holiday season accounted for 10 percent of all holiday spending, the Mastercard SpendingPulse data showed.
"The holiday season is coming in pretty healthy because that's the period of time that people have to concentrate their spending," said Michelle Meyer, chief economist at the Mastercard Economics Institute. "They know that promotions are heavy. They want to gift for others and for themselves. So the big question will be, what happens next?"
It's not unusual for people to expect deals during the holidays, but this year's sales may have marked a turning point for both consumers and retailers. After years of gleefully raising prices, retailers seemed to acknowledge that they needed to aggressively discount to lure inflation-weary shoppers. What remains to be seen is if the spending will continue without the discounts in place.
"As a consumer, you knew you were up against all of this inflation and pricing," said Duleep Rodrigo, the US sector leader for the consumer and retail division at KPMG, whose clients include major retailers and food and beverage companies. "It's taken a while for retailers to reshape the value buying equation, especially to work through the pricing challenges, because once you knew you could not increase pricing anymore, now you had to go back to packaging and promotions."
The shift to online shopping may have helped push down prices as it raised competition across all retailers. But even in stores, the discounts probably helped.
Joan Solomon, a 32-year veteran at Macy's, said Black Friday had been the busiest day of the holiday shopping season at the Clarins counter in the beauty department where she works.
"We are still holding on, and we're still making our numbers because people are shopping," Solomon said during an interview last week. "They may not shop as much as they used to, but they're shopping."
Ashley Foster, an executive director of an information technology company in Fullerton, California, said she felt good about the level of deals across the stores where she was shopping, which included chains like Abercrombie & Fitch and Nordstrom.
Foster, 40, said she felt items were significantly cheaper than last year.
"I would say I bought more for myself this year than previous years just due to how many deals were available," said Foster, who was primarily focused on buying gifts for her 17-year-old daughter.
Not all retailers will benefit from the spending. Department stores and apparel sold in stores had the most anemic growth of the categories that Mastercard SpendingPulse highlighted in its data released Thursday.
Before the holiday shopping season, Target, Macy's and Kohl's all cut their forecasts for profitability.
For some chains, the holiday season wasn't enough to fend off disaster: Both Big Lots and Party City said this month that they were preparing to close all of their stores.
But certainly some will come out on top. Retailers like Walmart and T.J. Maxx entered the holiday season on strong footing, drawing shoppers into their stores with low prices and surprising finds.
At FedEx, Brie Carere, the carrier's chief customer officer, said that going into the season, she had expected that shoppers would be more "conservative" with their spending.
"It does not feel that way right now," she said in an interview this month. "It feels right now like everybody is shopping. It feels like, for lack of a better term, a very normal, healthy peak season."
Large parcels -- over 50 pounds -- are also showing up more in FedEx's network, a sign that consumers have purchased higher-ticket items and shopped online to do so.