Americans are expected to spend more during what's traditionally the busiest shopping season of the year, but they're not exactly ready to shop 'til they drop like they have been in the past two years.
The National Retail Federation, the nation's largest retail trade group, said Tuesday that it expects sales during the winter holiday shopping period in November and December to rise 4.1 percent this year. That's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009, when sales were up just 0.3 percent.
The projections are an important indicator for retailers that depend on the last two months of the year for up to 40 percent of their annual sales. But the estimates also offer valuable insight for economists who closely watch consumer spending, which accounts for up to 70 percent of U.S. economic activity.
The holiday season is a gauge of the shopping habits and mindset of the average American during what has turned out to be a slow and uneven economic recovery. Right now, people are feeling better about rising home prices and a rebounding stock market, but job growth is still weak and prices for everything from food to gas are higher. At the same time, there's uncertainty about who the next president will be, and some Americans worry that the U.S. debt crisis could lead to another recession.
"In all the years, this is the most challenging year doing a forecast," said Matthew Shay, president and chief executive of the National Retail Federation, based in Washington, D.C. "There are so many uncertainties."
It's Americans' worries about the economic uncertainty that led the federation to predict slower growth during the winter holiday shopping season than the increase of 5.6 percent and 5.5 percent in 2010 and 2011, respectively.
Still, the forecast is higher than the average growth of 3.5 percent for November and December over the past 10 years. And it continues a growth trend that began after holiday sales fell 4.4 percent in 2008 during the middle of the recession.