Holiday Sales Face Test as Unemployment Reaches 4.6%, Part-Time Work Surges

US unemployment stood at 4.6% in November, with analysts saying the Christmas shopping season has started off well, but with an air of uncertainty. Data from the Bureau of Labor Statistics shows payroll growth has been minimal since April, and a rising number of Americans are working part-time because they cannot find full-time roles.

A holiday preview from Visible Alpha, published by S&P Global Market Intelligence, points to a season driven by tariffs, a recent Federal Reserve rate cut, and strong online sales — rather than a clear uptick in household incomes.

A Softer Jobs Market Behind the Festive Gloss

November's jobs report reveals a US labour market that's barely moving, with payrolls showing only modest growth since spring, and the unemployment rate remaining steady at 4.6%. More people are now stuck on involuntary part-time hours, which means many households are entering the holiday season with less income coming in each month.

Behind the headline figures, healthcare added 46,000 jobs in November, and construction grew by 28,000 roles. Conversely, transportation and warehousing shed 18,000 positions, mainly in courier services, while federal government employment fell by 6,000. Most other major sectors have remained largely flat.

Retailers Talk Up Resilience as Forecasts Stay Mixed

Retailers and policymakers remain optimistic about this Christmas, with the latest insights from Visible Alpha suggesting the season seems to be off to a good start.' Both companies and policymakers have repeatedly highlighted consumer resilience.

However, the same report warns that revenue expectations remain 'mixed', and this holiday period could still deliver some surprises in upcoming earnings reports. Analysts are cautious about how tariffs, seen as a one-off increase affecting Q4 and 2026, will be passed on to shoppers. There's also concern that US consumers may respond by buying more locally produced goods or, among wealthier buyers, travelling abroad for luxury purchases to avoid additional costs.

Interest rate cuts and buoyant markets add another layer of complexity. The Federal Reserve cut rates again on 10 December, and stock markets continue to climb, potentially boosting consumer confidence — especially among those with investments, outside the US.

While this environment might support short-term spending, it contrasts sharply with a jobs market that's barely adding roles and pushing more workers onto reduced hours — just as holiday bills start to arrive.

Shoppers Shift Online as Luxury Sales Stall

Any resilience in festive spending is likely to manifest primarily through online channels. Visible Alpha's forecast indicates that revenue growth from online retail giants like Amazon and Walmart will continue to rise. Amazon's international revenue is expected to grow about five percentage points faster than its North American sales in Q4 2025.

At Walmart, US sales are projected to be broadly flat, with international growth slowing. Nonetheless, this is more than offset by nearly 30% growth in international e-commerce and over 20% growth in US online sales for the 2025 financial year.

In Q4 alone, e-commerce is expected to see a 16% year-on-year sales increase in the US and a 21% rise internationally, suggesting more consumers are clicking 'add to basket' even if physical store visits feel quieter.

On the luxury front, Visible Alpha considers LVMH as a bellwether for high-end shopping. Its analysis suggests the group's revenue may fall by around 5% in the second half of the year. It also forecasts only a gradual return to growth for its main fashion and leather businesses in 2026 and 2027. This indicates that the appetite for very expensive bags, watches, and jewellery has cooled — even as mid-market shoppers continue to spend online through giants like Amazon and Walmart.

What This Holiday Mix Could Mean for 2026 Budgets

The jobs report indicates that more people are out of work than a year ago, with many others working shorter hours. As a result, numerous households are heading into Christmas with tighter budgets.

On paper, the economy remains in growth mode, but for many workers, it doesn't feel like a year to indulge. Consumer spending that does hold up is increasingly focused on online shopping, with big names like Amazon and Walmart seeing solid gains. Meanwhile, luxury sales are already looking softer than expected.

Interest rate cuts and rising markets may bolster confidence for some, particularly those with investments, but for those just trying to keep up with the next pay cheque, the outlook remains challenging.

For many families, the real squeeze will come after the decorations are packed away. If a significant portion of workers remain on reduced hours and retailers continue tempting consumers online, the true test of this 'resilient' consumer story will be in the bills that arrive in January and February.