• by Sarah Mahoney  @mahoney_sarah, October 6, 2011

 

The National Retail Federation says it expects holiday spending to rise just 2.8% this year, with a total of $465.6 billion. While that gain is far less fa-la-la-la-la than the 5.2% gain retailers saw last year, the NRF says it is still a smidge above the 2.6% average of the last 10 years.

Retailers have posted sales gains for the last 14 months, the Washington D.C.-based trade association says, and consumers have lowered their household debt. But ongoing concerns about the economy have them worried, as do more difficult comparisons over last year's better-than-expected results.

"Just when you think the U.S. economy is turning around, another factor comes into play that changes the game," NRF Chief Economist Jack Kleinhenz says in its release. "Persistently high unemployment, an erratic stock market, modest income growth and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel."

The NRF bases its predictions on several indicators, including consumer confidence, consumer credit, disposable personal income and previous monthly retail sales releases.

For the first time, it says it used the same model to predict hiring trends, and estimates retailers will add an estimated 480,000 to 500,000 seasonal workers, a comparable hiring rate compared to the 495,000 added last year. It says it is also a good sign that the industry has been steadily adding jobs in advance of the big fourth quarter, adding 100,000 jobs since August.