Despite economic uncertainty, the National Retail Federation says holiday spending could reach a trillion dollars for the first time ever, this year.

SACRAMENTO, Calif. — Despite economic uncertainty, the National Retail Federation says holiday spending could reach a trillion dollars for the first time ever, this year.

This comes as tariffs are raising prices on many products.

“Prices are up, almost across the board, thanks, in part– well, thanks in large part to tariffs,” said UC Davis Professor of Economics Christopher Meissner. “That’s going to make things difficult. It’s going to make that basket of gifts and goods for the holidays that much more expensive.”

He says consumers are feeling the pinch. 

“The best estimates I’ve seen have prices about 6% above where they should have been without tariffs,” Meissner said. “A lot of people are stressed out about these high prices, and there’s a weak job market, too.”

But, he says, it’s not all bad.

“One of the other brighter pieces of news is the Fed has lowered interest rates several times this fall, and they probably will keep doing so in the medium term,” he said.

ABC10 spoke with local business owner Peter Muñoz. He owns pop-up coffee shop ‘The Pour Over Coffee Co’ and says—business has been steady.

“I think a lot of people prefer to support local,” he said. “There’s a lot of opportunity to support local business. They know that their money is being re-infused into the community, that there’s a relationship built with local small businesses.”

That was certainly true over at the Tahoe Makers Market on Saturday, at Tahoe Elementary School.

ABC10 spoke with shopper Lexi Crook, as she and her daughter looked for holiday gifts, “instead of just filing through all the stuff on Etsy and Amazon,” she said.

She said she’s turning to more in-person shopping at locally owned businesses this holiday season, amid economic uncertainty.

“It’s making me more aware of where I want to spend my money, especially since things are becoming so much more expensive these days,” Crook said. “I would rather support local artists and vendors and people who are maybe just also trying, themselves, to get by…Because that’s the only way we’re going to get through stuff, is by taking care of one another.”

Professor Meissner says—overall, beer prices are down quite a bit and the cost of wine hasn’t grown as much as it could have. So at least that cup of holiday cheer won’t break the bank.

He recently published a book entitled “One from the Many: The Global Economy Since 1850.” That’s available HERE.

WATCH MORE ON ABC10 | Ways to keep your holiday spending in check | Dollars & Sense

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