(Reuters) - U.S. holiday sales will increase by 3.7 percent in 2015, marking slightly slower growth than last year as stagnant wages and sluggish job creation weigh on consumer sentiment, according to an outlook from the leading retail industry group.
The National Retail Federation forecast sales for the last two months of the year at $630.5 billion, excluding for autos, gasoline and dining out. The growth rate would be significantly higher than the 10-year average of 2.5 percent but below the 4.1 percent increase in 2014, the NRF said.
The industry lobby's forecast is a closely watched benchmark for the upcoming holiday season, when retailers like Macys Inc
, Wal-Mart Stores Inc and Target Corp generate an outsized portion of their profits and sales. While some economic indicators have improved, U.S. consumers remained "somewhat torn between their desire and their ability to spend" because of concerns about a possible government shutdown and slow job creation and income growth, NRF Chief Executive Officer Matthew Shay said in statement.On a media call, Shay pointed to U.S. Labor Department data released last week that showed employment had its smallest two-month gain in more than a year.NRF Chief Economist Jack Kleinhenz said deflation was also holding back retailers' revenue growth. An index for general merchandise compiled by the U.S. Bureau of Economic Analysis shows prices are down more than 2 percent from a year earlier, he said. "We have to recognize that people are actually getting their goods, but they are probably getting them a little bit cheaper than last year," Kleinhenz said on the call. Prices will be "very competitive" this holiday season, he added.Kleinhenz also pointed to increased spending on big-ticket items like cars, which do not show up in the NRF's holiday tally.Online sales will rise by 6 percent to 8 percent during the holiday to as much as $105 billion, according to the NRF. It said November and December would account for 19 percent of the industry's $3.2 trillion in total annual sales.The NRF said its holiday forecast was based on an economic model that includes several indicators, including data on consumer credit, disposable income and monthly retail sales.Other groups have also forecast slower growth this holiday season, reflecting concerns about turmoil in the financial markets as well as the stagnant economy.Frank Badillo, director of research at MacroSavvy, said he expected holiday sales growth to slow to 3.5 percent from 4.5 percent last year. Younger households, which have benefited most from recent job gains, are spending more on cars, restaurant meals and other non-retail items, he said. NPD has forecast a deceleration to growth of between 2.8 percent and 3.2 percent from 3.5 percent, excluding groceries and autos, for November to mid-January. The low end of that outlook would mark the slowest growth since 2009.Consulting firm AlixPartners said it expected 2.8 percent to 3.4 percent growth this holiday season, slowing from 4.4 percent in 2014. (Reporting by Nathan Layne in Chicago; Editing by Jeffrey Benkoe and Lisa Von Ahn)
