NEW YORK – Shoppers came back in force for the holidays, right to the end. After two dreary years, Christmas 2010 will go down as the holiday Americans rediscovered how much they like to shop.
People spent more than expected on family and friends and splurged on themselves, too, an ingredient missing for two years. Clothing such as fur vests and beaded sweaters replaced practical items like pots and pans. Even the family dog is getting a little something extra.
"You saw joy back in the holiday season," said Sherif Mityas, partner in the retail practice at A.T. Kearney.
A strong Christmas Eve augmented a great season for retailers. The National Retail Federation predicts spending this holiday season will reach $451.5 billion, up 3.3 percent over last year.
That would be the biggest increase since 2006, and the largest total since a record $452.8 billion in 2007. The holiday season runs from Nov. 1 through Dec. 31, so a strong week after Christmas could still make this the biggest of all time. Spending numbers through Dec. 24 won't be available until next week and final numbers, through Dec. 31, arrive next month.
The economy hasn't improved significantly from last year. Unemployment is 9.8 percent, credit remains tight and the housing market is moribund. But recent economic reports suggest employers are laying off fewer workers and businesses are spending more. Consumer confidence is rising.
"I was unemployed last year, so I'm feeling better," said Hope Jackson, who was at Maryland's Mall in Columbia on Friday morning. Jackson bought laptops and PlayStation 2 games for her three daughters earlier in the season but was at the mall on Christmas Eve to grab $50 shirts marked down to $12 at Aeropostale.
Some spending growth online has been driven by free shipping offers and convenience. From Oct. 31 through Thursday, about $36 billion has been spent online, a 15 percent increase over last year, according to MasterCard Advisors' SpendingPulse.
Taubman Centers and Mall of America have reported strong clothing sales, which was a hard sell last year. Jewelry sales sparkled throughout the season.
Stores expect solid profits because they didn't have to slash prices as Christmas neared, analysts say.
Some habits adopted during the recession lingered. Shoppers used cash more and credit cards less.
The final six days of the holiday shopping season are Sunday through next Friday. They're only 10 percent of the 61 holiday shopping days but can account for more than 15 percent of spending.
For the economy, the key question is whether strong spending this holiday season will continue into the new year.
Still, stores were encouraged by what they saw in the final stretch of the holiday season.
Even pets made it back onto gift lists this year. Three Dog Bakery, a pet-supply chain in Clinton Township, Mich., whose specialties include $15.99 jars of banana-nut dog cookies, opened three years ago at the start of the recession.
"We opened at the worst possible time in the world. Everyone was pulling back," owner Chad Konzen said.
Wednesday, the store had its best day ever. "Gourmet, all-natural dog treats are not a necessity," Konzen said. "But now people are feeling more comfortable. You can only be thrifty for so long."
AP Retail Writers Ellen Gibson in Columbia, Md., and Mae Anderson in Atlanta; and AP Writers Jessica Gresko in Washington; Barbara Rodriguez in Miami; and Holly Ramer in Concord, N.H., contributed to this story.