The National Retail Federation expects holiday retail sales to total between $727.9 billion and $730.7 billion this year, the retail trade association announced Thursday. That total would be an increase of 3.8% to 4.2% over 2018's retail sales during November and December.
"There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year," NRF Chief Economist Jack Kleinhenz said in a statement. "Job growth and higher wages mean there's more money in families' pockets, so we see both the willingness and ability to spend this holiday season."
NRF estimates retailers will hire between 530,000 and 590,000 temporary workers this year. Last holiday season, 554,000 temporary workers were hired.
Despite continuing trade tensions, NRF is optimistic about the forecast for holiday spending. "Retailers are using a myriad of mitigation tactics to limit the impact on consumers, and the impact will ultimately vary by company and product," the association said. Some large retailers, like Target, have warned suppliers they won't pay more or raise prices for their customers. Small businesses, NRF notes, may struggle with tariffs the most through the holiday season.
NRF's forecast is brighter than some others. According to consulting firm AlixPartners, only 31% of consumers plan to spend the same or more this holiday season compared to last year. In addition, it reported that one-fifth of consumers with smaller holiday budgets would forgo a purchase if tariffs increased prices more than 10%.
But trade tensions aren't the only factor at play. Last year, a government shutdown and a substantial stock market dip contributed to consumer caution. NRF had predicted 650,000 seasonal hires last year, its estimate falling short by almost 100,000 jobs.
Sales also fell short of NRF's expectations last year, with $701.2 billion in sales, an "unusually small increase" of 2.1% over 2017. Average holiday sales have increased 3.7% over the previous five years, putting this year's forecast in a solid spot. The estimates do not include car dealers, restaurants or gas stations.