Sales during the holiday season in the U.S. will increase 3.7% in 2015, which is less of a growth than last year as U.S. consumers worry about a possible shutdown of the government and sluggish growth in wages, said the leading industry group in retail.
The National Retail Federation or NRF has forecast holiday sales from November through the end of December 2015 to be $630.5 billion. That figure excludes restaurants, gas and automobile sales. The rate in growth would be substantially higher that the average over the past 10-years of 2.5%, although it would be less than last year’s growth of 4.1%.
The forecast by the NRF is a benchmark closely watched for the upcoming holiday shopping season.
NRF CEO and President Matthew Shay through a prepared statement said that while there were economic indicators that have improved, consumers in the U.S. remained torn between a desire to spend and the true ability they have to spend due to worries about the health of the economy.
Shay also said that potential disruptions from another shutdown in the federal government during the middle of December and a slower rate of new jobs and growth in income were only a few of the key factors that could impact the spending by holiday shoppers this winter.
The NRF said that holiday sales would represent 19% of the industry’s more than $3.2 trillion in sales for the year. Many of the retailers earn a disproportionate size of profits during this period.
Online sales have been projected to increase between 6% and 8% during the same holiday shopping period to over $105 billion, said the NRF.
An analyst on Wall Street predicted that sales growth during the holiday would be between 2.8% and 3.2% down from the 3.5% of last year, which excludes autos and groceries, for November through the middle of January.
The lower end of the forecast would mark its slowest growth in six years.
Other organizations have forecast slower growth for this year’s holiday season, which reflects the concerns about the impact of wage growth and the turmoil currently in world’s financial markets.