Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Weakest holiday sales since '02 seen

Retail group expects just a 2.2% increase, about half the 2007 rate, which would be the slowest growth in six years.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- The nation's retailers could be in for the weakest holiday season in six years as the sluggish economy continues to squeeze household budgets, according to a trade group report issued Tuesday.

The National Retail Federation forecasts that retail sales between November and December will expand 2.2% to $470.4 billion. That's below the ten-year average of 4.4% and the lowest since 2002, when sales rose 1.3%.

"Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending," said NRF Chief Economist Rosalind Wells in a statement.

Weakness in the housing market, rising unemployment and lackluster income growth are among the challenges that consumers will face this holiday season, the NRF said.

Additionally, high energy and food costs will continue pinch American consumers. And the crisis in the nation's financial system will erode consumer confidence in the months ahead.

"We expect consumers to be frugal this season and less willing to splurge on discretionary items," Well said.

Given the current outlook, the NRF does not expect the economy to rebound until the second half of next year.

Last year's holiday sales rose 3% (correct), driven largely by gains in the consumer electronics market, NRF said. The forecast was for a 4% increase.

-- An earlier version of this story erroneously reported last year's sales gain. CNNMoney.com regrets the error. To top of page

The nation's retailers could be in for a cheerless holiday season this year as the sluggish economy continues to squeeze household budgets.
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Driving the ultimate in '50s Mercedes-Benz style The SC was the car that re-introduced Mercedes-Benz as a global luxury car icon. More
Driving the world's first car Driving a replica of the 1886 Benz Patent Motorwagen, the first internal combustion automobile. More
Your guide to Cyber Monday sales This year, more Cyber Monday sales than ever start well before Monday. Here's where to shop if you don't get your fill on Black Friday. More