Holiday sales expected to be up 3.6 percent

NEW YORK (AP) - Americans are expected to spend at a faster clip than last year for the critical holiday season, helped by an economy that should only continue to pick up, according to the nation's largest retail industry trade group.

The National Retail Federation, based in Washington, D.C., is forecasting holiday sales for the November and December period to rise 3.6 percent to $655.8 billion, much better than the 3 percent growth seen in the year-ago period.

The figure also is much higher than the 10-year average of 2.5 percent and above the 3.4 percent growth seen since the recovery began in 2009. The dollar figure excludes sales from autos, gas and restaurants but includes online spending and other non-store sales. The group estimates non-store sales should rise 7 percent to 10 percent to as much as $117 billion. Last year, that rate was 9 percent.

NRF President and CEO Matthew Shay noted this year has had some rocky moments like a warm winter and an unseasonably warm fall. That has hurt sales of clothing and forced stores to discount more heavily. But Shay said all the fundamentals are in place even if the noise from the presidential elections might serve as a short-term distraction.

"Our forecast reflects the very realistic steady momentum of the economy and industry expectations," Shay said. "We remain optimistic that the pace of economic activity will pick up in the near term."

The forecast is based on an economic model that takes into account such indicators as consumer credit, disposable personal income and monthly retail sales. It's a key industry barometer for retailers who depend on the last two months of the year. Holiday sales account for nearly 20 percent of annual retail industry sales. It also offers a snapshot of the mindset of the shopper.

The forecast comes as retailers continue to wrestle with broader changes in how shoppers are buying. They're shifting more of their money to experiences like travel and away from clothing and other stuff. And they're increasingly buying more online, forcing stores to look at new ways to bring shoppers into their stores.

But National Retail Federation executives told reporters on a call Tuesday there's plenty of reason for optimism.

"We are in better shape than we were last year," said the retail trade group's economist, Jack Kleinhenz. "We have a lot more people working this year."

Government figures show that 2.5 million more Americans have jobs as of August compared to a year earlier. The government is scheduled to release September job numbers on Friday. The current unemployment rate is 4.9 percent, lower than the 5.1 percent rate a year ago.