U.S. consumers showed resilience this holiday season, driving retail spending up 4.2% year over year, according to preliminary data released Tuesday by Visa.

The report from Visa Consulting and Analytics indicated that despite lingering economic headwinds, shoppers were still spending, particularly on technology and personal goods.

The findings tracked payments activity over a seven-week period beginning Nov. 1 using a subset of Visa payments network data in the U.S. and cover core retail categories, excluding spending on automotive, gasoline and restaurants. The figures are also not adjusted for inflation.

In-store shopping accounted for the bulk of holiday spending, capturing 73% of total retail payment volume during the period, while online purchases made up the remaining 27%.

However, e-commerce was the primary driver of growth, with online sales rising 7.8% compared with last year, reflecting continued demand for convenience and early-season promotions.

“The underlying surprise here … is that consumer spending is holding up reasonably well in light of softer consumer confidence than we had this time last year and a number of headwinds and concerns about inflation,” Michael Brown, principal U.S. economist at Visa, told CNBC.

Brown noted that the 2025 holiday season marked a distinct shift in consumer behavior, citing the growing influence of artificial intelligence in how shoppers find products and compare prices.

“We are seeing consumers use AI in a big way in comparison shopping and then helping to narrow down that perfect gift,” Brown said. “This is the first holiday shopping season where roughly half of the consumers in that survey responded that they are going to leverage AI for one of those two tasks.”

The breakdown of spending categories highlights a shift toward personal goods and convenience, and away from home renovation projects.

Electronics emerged as the season’s top-performing category, with sales climbing 5.8%. Visa attributed this jump to a refresh cycle driven by “high-performance devices in the AI era.”

Apparel and accessories also posted strong numbers, rising 5.3%. General merchandise stores — retailers that offer a “one-stop” experience — saw a 3.7% lift.

Conversely, the home improvement sector struggled during the holidays. Spending on building materials and garden equipment fell 1%, suggesting consumers prioritized gift-giving and gadgets over home maintenance as the year closed out.

Furniture and home furnishings remained essentially flat, eking out a 0.8% gain.

While the headline number is positive for the retail sector, the lack of inflation adjustment means the “real” volume growth will likely be more modest depending on the final Consumer Price Index readings for the period.

Currently, Brown said, real spending growth adjusted for inflation is still up about 2.2% this season.

“That’s not too bad in light of a lot of uncertainty this year,” Brown said. “The consumer is uncertain, they’re cautious, but they’re also smart about how they’re spending their money.”

Visa’s numbers also point to a disconnect between sentiment and action this season.

According to the CNBC All-America Economic Survey released last week, 41% of Americans said they planned to spend less for the holidays this year, 6 points higher than a year ago.

The CNBC survey found that the high cost of goods was emerging as a major factor in determining how much shoppers spend and where they spend, suggesting yearslong inflation and the rise in import goods prices from tariffs are being felt at checkout.

U.S. shoppers are willing to spend this holiday season — despite falling consumer confidence and anxiety over prices — but only if the deals are there, Tanger CEO Stephen Yalof told CNBC on Tuesday.

“Retailers are discounting to meet the consumer, and the consumer is responding by shopping,” Yalof said on CNBC’s “Money Movers.”

Yalof said Tanger tries to offer shoppers access to premium brands at prices that feel consistently compelling. Retailers across the company’s outlet portfolio leaned heavily into promotions during the holidays, helping sustain traffic and sales.

Customers are “looking to come into a space where they can buy products at full price, maybe above the price point they want to spend, but they can embrace that price point because they know it’s value priced every day,” Yalof said.

He described holiday traffic at Tanger’s outlet centers as strong, citing full parking lots and steady activity through November and December.

“I feel like the customer is very resilient,” he said. “They’re looking to spend.”

Yalof’s comments come on the heels of fresh data showing that consumers are spending more than their confidence levels might suggest.

U.S. retail spending rose 4.2% year over year during the holiday season, before adjusting for inflation, according to preliminary data from Visa released Tuesday.

The report, which tracks payments activity beginning Nov. 1, found that in-store shopping accounted for 73% of spending, while online sales drove growth, rising 7.8% from a year earlier.

At the same time, sentiment remains subdued.

Consumer confidence weakened in December as Americans grew more anxious about persistently high prices and the impact of President Donald Trump’s sweeping tariffs.

The Conference Board reported Tuesday that its consumer confidence index fell 3.8 points to 89.1, down from an upwardly revised 92.9 in November and nearing the 85.7 level seen in April, when the administration rolled out broad import duties on U.S. trading partners.

Likewise, the latest CNBC All-America Economic Survey, released last week, found that 41% of Americans planned to spend less this holiday season, up 6 points from a year ago, as higher prices continued to shape where and how shoppers spend.

Looking ahead, Yalof said retailers appear confident about demand in 2026.

“Retailers want stores. They love bricks and mortar,” Yalof said, adding that brands are increasingly looking to control their own physical retail presence as department stores continue to consolidate.

The need for second — and often third — incomes is mounting, according to a top digital bank executive.

Current CEO Stuart Sopp finds almost half of the firm’s payment customers have more than one job.

“If you’re having a paycheck over the past year, 20, 25% of paycheck depositors have at least one extra job. A further 20% incremental from there have two jobs,” Sopp told CNBC’s “Fast Money” on Thursday. “They’re trying to make that money go further because of inflation.”

From DoorDash to Shopify to side businesses, Sopp finds the number is higher than prior years because money doesn’t go as far.

“Wage inflation is moderating quite substantially,” he said. “America has a sort of tail of two cities right now. Two groups: The wealthy and less affluent.”

Sopp launched Current, which provides mobile banking without monthly fees and offers secured credit cards, in 2015. It originally focused on helping medium to lower income customers. His company Current reports almost five million members.

He’s particularly concerned about less affluent consumers spiraling into debt to pay for basic necessities.

“They’re being forced into risks like risky credit cards,” noted Sopp, a former Morgan Stanley trader. “Unsecured credit cards… are not suitable for everyone.”

The Federal Reserve Bank of New York found credit card debt topped $1 trillion for the first time ever in the second quarter.

“It’s going to be way bigger this year,” Sopp said.

Disclaimer