NEW YORK -- Holiday sales are expected to rise 5 percent this year, less than the 6.1 percent in the year-ago period, as consumers face still high energy costs, rising interest rates and a cooling housing market, the National Retail Federation said .
The world's largest retail trade association estimates that total retail sales for the combined November and December period should reach $457.4 billion, compared with $435.6 billion in the year-ago period. The figures include business from grocery stores, health and personal care stores, home improvement stores, office supply stores, and florists. Total sales, however, exclude business from auto dealers, gas stations, and restaurants.
``Consumers have faced a number of economic challenges this year and have taken them in stride," said Rosalind Wells, chief economist of the National Retail Federation, in a statement. ``Although sales will not be as robust as last year, retailers can still expect above-average holiday sales growth."
Shoppers have remained resilient throughout the year even amid rising gasoline costs, though the nation's merchants are experiencing a slight slowdown starting this summer.
Michael Niemira, chief economist at the International Council of Shopping Centers, expects same-store sales to be up 3 percent for the November-December period. That compares with 3.5 percent in the year-ago period.
Overall, the good news is that retreating gasoline prices could help offer some relief this holiday season to discounters such as Wal-Mart Stores Inc., whose core low-income consumers have pulled back on spending. But worries remain about the deteriorating housing market, and how it will affect middle-income shoppers.
Whether it will have a soft landing or, as some fear, suffer a prolonged slump remains to be seen. But a big source of cash -- home equity lending -- is drying up as higher interest rates and the leveling off of housing prices have made such financing less attractive.