But retail group cautions that predications are hard to make this year
Holiday retail sales are expected to increase between 3.8% and 4.2% this year, bringing total spending in the busiest shopping months of November and December to between $728 billion and $731 billion, according to the National Retail Federation.
During the past five years, holiday sales have averaged year-over-year growth of 3.7%, according to the NRF, a trade group with headquarters in New York.
The forecast, which exclude automobile dealers, gasoline stations and restaurants, was released Oct. 3 and comes with some caveats.
“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” says Matthew Shay, NRF president and chief executive officer. “Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric. Consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by continued deterioration of these and other variables.”
NRF chief economist Jack Kleinhenz says that uncertainty makes forecasting this year’s holiday sales particularly challenging.
“There are probably very few precedents for this uncertain macroeconomic environment,” he says. “There are many moving parts and lots of distractions that make predictions difficult. There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year. Job growth and higher wages mean there’s more money in families’ pockets, so we see both the willingness and ability to spend this holiday season.”
Online sales are expected to continue their double-digit gains, increasing between 11% and 14% to between $162.6 billion and $166.9 billion, up from $146.5 billion last year, according to the NRF.
Last year, holiday sales rose only 2.1%, an anemic performance the NRF attributed to a government shutdown, volatile stock market and other factors.
Thus far, seasonal hiring has been strong and started early, according to the NRF. The trade group expects retailers to hire between 530,000 and 590,000 temporary workers. Last year, retailers hired 554,000 seasonal staffers.