NRF: Holiday sales to slow from last year's blistering pace

NEW YORK (AP) — The National Retail Federation, the nation’s largest retail trade group, expects holiday sales growth will slow to a range of 6% to 8%, compared with the blistering 13.5% growth of a year ago.

But inflation can pump up sales even if people are buying less, and with prices surging to uncomfortable levels, industry analysts believe that inflation-adjusted sales could be flat, or even negative this year.

Holiday sales have risen an average of 4.9% over the past 10 years but Americans ramped up spending during the pandemic, which accounted for some outsized sales numbers.

The NRF on Thursday predicted that sales in November and December will grow to between $942.6 billion to $960.4 billion. Holiday sales exploded during the pandemic with Americans splurging on pajamas and home goods, mostly online.

The group expects that online and other non-store sales, which are included in the total, will increase between 10% and 12% to between $262.8 billion and $267.6 billion.

The numbers exclude automobile dealers, gasoline stations and restaurants.

The forecast considers a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit, previous retail sales and weather.

The forecast is in line with a slew of holiday forecasts from various research and consulting firms point to a sales slowdown from last year. AlixPartners predicts holiday sales to be up anywhere from 4% to 7% from last year, which was up 16%, according to its calculations.

Consumer spending accounts for nearly 70% of U.S. economic activity, and Americans have remained resilient even with inflation near four-decade highs. Yet surging prices for everything from mortgages to rent have upped the anxiety level. Overall spending has slowed and shifted...