US Retail Sector NAICS 44, 45

Dec 27, 2025 - Faster Growth Expected

• The US retail industry is projected to grow at a CAGR of 5% between 2025 and 2029, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy‘s anticipated growth. The report projects sluggish but positive economic growth in the coming years. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. Real disposable income is being limited by a slow rise of employment and higher consumption prices, with a projected increase of real disposable income of 1.8% in 2025 and 1.6% in 2026. The report noted that some shifts in consumer behavior persisted in 2025, including increased online shopping.
• Consumer sentiment in December 2025 signaled a cautious spending environment for the US retail sector. The University of Michigan Index rose 3.7% month over month to 52.9, though confidence remains 30% below December 2024, and 63% of consumers expect rising unemployment. Inflation expectations eased to 4.2% (1 year) and 3.2% (long run), offering modest relief but not enough to shift overall caution. Meanwhile, the Conference Board Consumer Confidence Index fell to 89.1, with the Present Situation Index down 9.5 points and expectations holding at a recession associated 70.7. Consumers continue shifting spending toward essential, lower cost categories. For US retailers, these indicators point to ongoing pressure on discretionary spending, softer demand for big ticket items, and continued strength in value oriented and necessity driven segments. Retailers may face a slow growth environment as consumers prioritize affordability and delay nonessential purchases.

• Holiday employment in retail remains a critical seasonal dynamic, with recent trends signaling moderation, according to recent data released by the US Bureau of Labor Statistics (BLS). In 2024, five key retail industries added 492,000 workers during the holiday buildup, slightly stronger than 2023. Layoffs in early 2025 were smaller, with 29,000 seasonal employees retained compared to just 4,000 the prior year. This reflects a shift from pre-pandemic patterns, when buildups averaged over 600,000 hires and layoffs often exceeded additions. Since 2022, hiring has averaged closer to 475,000, while retention has dropped sharply from 127,000–168,000 in 2021–2022 to an average retention of about 28,000 in 2023–2025. For retailers, this suggests a cautious approach: meeting holiday demand with leaner seasonal hiring while limiting post-season workforce reabsorption.
• The retail sector's seasonal hiring is projected to fall below 500,000 positions in Q4 2025, marking the lowest level since 2009, according to a report by Challenger, Gray & Christmas in Retail Dive. The decline follows a 4% year-over-year decline in 2024, when 543,100 jobs were added. Economic pressures, including inflation, tariffs, and rising operational costs, are prompting retailers to rely more on automation and existing staff rather than expanding seasonal headcount. Target, for example, is prioritizing increased hours for current employees over new hires. While some retailers may ramp up hiring if sales outperform expectations, the muted pace of announcements suggests conservative planning. The impact of reduced seasonal hiring may result in constrained customer service capacity during peak periods and signal cautious sales expectations. Strategic staffing and operational agility will be key for retailers to navigate holiday demand amid economic uncertainty.