U.S. Christmas Sales Forecast to Rise 4.5%

The National Retail Federation (NRF) is forecasting U.S. sales in the crucial Christmas holiday season to rise 4.5 percent over last year to $219.9 billion.

The all-important holiday season accounts for nearly one-quarter (22.83 percent) of the United States’ annual retail sales.

Retail sales saw strong growth in the first half of this year but more subdued growth in the third quarter.

"Although consumer spending has been inconsistent in recent months, we expect the holiday season to bring more stability to the industry," said NRF Chief Economist Rosalind Wells. "Home-related merchandise and consumer electronics should do well this holiday season and trendy fashions should help spark clothing sales."

The NRF said retailers might struggle to achieve gains in sales this year over last year since the holiday season in 2003 saw a solid 5.1 percent rise over the 2002 season which only recorded a 1.2 percent rise.

Wells said economic factors affecting holiday sales this year would include higher energy costs, rising interest rates, geopolitical threats and slow income growth.

"Retailers know they will have their work cut out for them this holiday season," said NRF President and CEO Tracy Mullin. "Despite economic and geopolitical concerns, consumers continue to set aside money for what is most important to them."