Holiday sales expected to escalate

U.S. retail sales this holiday season may grow at a faster pace than last year, fueled by rising wages and a stronger job market, the National Retail Federation said.

Consumer purchases may increase 3.6 percent to a $655.8 billion in November and December, excluding autos, gas and restaurant sales, the Washington-based NRF said in a statement Tuesday. Sales climbed 3 percent last year, and the seven-year average since the recession ended in 2009 is 3.4 percent, the group said.

The U.S. personal savings rate fell to 5.7 percent of disposable income in August, down from 6.2 in March, according to the Commerce Department.

“All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season,” NRF Chief Executive Officer Matthew Shay said in the statement.

The NRF’s holiday sales estimate was lower than a projection from Deloitte, which said last month that sales may increase as much as 4 percent. A separate survey of about 1,000 U.S. consumers by AlixPartners said that 83 percent of shoppers expect to spend the same or more this season.

Political uncertainty and the chance of unseasonably warm weather, are the biggest threats that could restrain holiday spending, NRF Chief Economist Jack Kleinhenz said. Still, the strong economy is likely to fuel shoppers this season.

“Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending …,” Kleinhenz said.