Christmas Shopping SeasonThe National Retail Federation is forecasting a less cheerful holiday season for America's stores, which means shoppers can probably expect to scoop up big discounts as retailers work harder to get cash registers ringing.

Holiday retail sales for 2011 are expected to inch up just 2.8% to $465.6 billion, a marked drop from 2010, when sales rose 5.2%, beating most analysts' expectations, according to figures released by the NRF Thursday.

Consumers are in a cautious buying mood, Pam Goodfellow, consumer insight director for Bigresearch, the consumer intelligence firm that compiled the consumer data included in the NRF's forecast, tells DailyFinance.

Stubbornly high unemployment, sluggish income growth, a troubled housing market and concerns over the debt crisis are conspiring to dampen spending this holiday season.

As a result, in September, "22.7% of consumers said they were confident in the economy, marking the lowest reading we found [during the same time period] over the past 10 years," according to Bigresearch's survey, Goodfellow says.

In turn, shoppers will be "much more focused on necessities."

The mood was different a year ago, when economists declared that the recession had officially ended in 2009, signaling to shoppers that the dark days of the financial crisis were behind them. That helped set the tone for a solid holiday retail selling season, Goodfellow says.

It has since become clear that the economy is not rebounding, she says.

Despite the comparatively muted outlook for holiday spending this year, the sales forecast is still slightly higher than the ten-year average holiday sales increase of 2.6%, according to the NRF says. And, notes Goodfellow, consumers are still financially better off than they were in 2009, during the depths of the Great Recession.

Readers, how has the economy impacted your holiday spending budget?

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Terry and Mandy

Since I just won millions in a lottery in Ireland, I will be buying new cars for all my friends and family for the holidays. I just have to send the $2500 winner's fee to a guy in Africa first. Then it's off to the auto showrooms with pockets full of cash.

October 06 2011 at 11:05 PM Report abuse rate up rate down Reply