NEW YORK (CNN/Money) - Some U.S. retailers said Monday they believe rising income and low interest rates will fuel consumer spending and higher retail sales in 2003.

The National Retail Federation (NRF), which calls itself the world's largest retail association, said it expects sales at general merchandise, apparel, furniture, electronics/appliance, sporting goods, hobby, book and music stores -- what it calls "GAFS sales" -- to rise 5.6 percent in 2003 from 2002.

GAFS sales rose 5.4 percent in 2002 from 2001.

"The economy has been going through a 'soft spot' in activity, which will give way to accelerated growth this year," NRF chief economist Rosalind Wells said. "2003 will not be a year of exceptional strength, but rather of solid advance. GAFS sales trends will parallel overall economic activity and improve during the year."

The NRF said its outlook is clouded by weak labor markets and "geopolitical risks" -- businesses are still reluctant to hire workers, and uncertainty about the prospects of a U.S.-led war in Iraq is the biggest obstacle to accelerated economic growth.

Retailers also will suffer from a lack of pricing power, the NRF said, and will have to use "ingenuity" to attract shoppers.

"Consumers will still feel compelled to seek out the best deal for their money," Wells said.