The nation’s retailers expect sales in the months of November and December to increase 3.9%, to $602.1 billion, over 2012’s actual 3.5% holiday season sales growth. The forecast is higher than the 10-year average holiday sales growth of 3.3%. 

“Our forecast is a realistic look at where we are right now in this economy – balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years,” says National Retail Federation president and CEO Matthew Shay. “Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made.”  

“Our forecast is also somewhat hinging on Congress and the Administration’s actions over the next 45 days,” he says. “Without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence.”

The holiday season can account for anywhere from 20% to 40% of a retailer’s annual sales and accounts for approximately 20% of total industry annual sales, according to the group.

“The economy continues to expand, albeit at an unspectacular pace,” says Jack Kleinhenz, NRF chief economist. “In order for consumers to turn out this holiday season, we need to see steady improvements in income and job growth, as well as an agreement from Washington that puts the economic recovery first. Our forecast leaves room for improvement, while at the same time provides a very realistic look at the state of the American consumer and their confidence in our economy.”

NRF’s holiday sales forecast is based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income, and previous monthly retail sales releases.

Meantime, Shop.org has just released its 2013 online holiday sales forecast, showing a bigger increase than brick and mortar stores. It expects sales in November and December to grow between 13% to 15% over last holiday season, to as much as $82 billion.