NEW YORK (CNN/Money) -
Retailers are expecting to ring up their best holiday sales gains in four years, the National Retail Federation said Tuesday.
The NRF, which represents the retail industry, said sales for the crucial November and December shopping period are expected to grow 5.7 percent from last year to about $217 billion, the biggest increase since an 8.2 percent jump in holiday sales in 1999.
"After several strong months of retail sales growth, it seems clear that the economy is picking up momentum just in time for the holidays," said NRF Chief Economist Rosalind Wells in a statement. "Retail sales gains for the 2003 holiday season will be far better than the meager increases retailers experienced a year ago," Wells said.
Holiday sales grew just 2.2 percent to $205.6 billion last year, the worst Christmas for retailers in a decade as consumers shied away from spending freely amid an economic recession and a weak jobs market. Retailers can post half or more of their annual sales and profits during the eight-week holiday selling period.
Low interest rates and inflation, as well as the tax cuts, put more money into consumers' wallets and boosted spending this year, economists and analysts say.
But Wells noted the weak job market, higher energy prices and geopolitical concerns are concerns for retailers going forward.
Kurt Barnard, an independent retail consultant, said the NRF's forecast looked a bit optimistic.
"The 5.7 percent projection is not too much out of line but it is at the higher end of projections," said Barnard. He expects holiday sales to grow a more modest 3.5 to 4 percent.
Michael Niemira, senior economist with Bank of Tokyo-Mitsubishi, said 5.7 percent growth is "doable. The momentum is in place and consumers continue to spend."
According to Niemira, sales at stores open at least a year -- a key measure known as same-store sales -- are expected to grow 4.5 percent over last year.