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.
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?