The holidays are looking a bit brighter for retailers.
The National Retail Federation announced on Thursday that it upgraded its sales forecast for the season.
On Oct. 6, NRF projected a 2.8 increase over last year, but robust consumer spending through October and November, coupled with a busy Black Friday, led to a new projection of a 3.8 percent increase.
“Retailers are cautiously optimistic that this season will turn out better than initially expected, bringing added stability to our recovering economy at a time when America needs it most,” NRF President and CEO Matthew Shay said in a statement. However, he cautioned that domestic politics and the European debt crisis could still have a negative impact on retail, not only through the holidays but also into 2012.
One cause for optimism is that Americans have completed significantly less of their holiday shopping than usual, according to NRF’s most recent holiday survey — meaning there are still a lot of potential sales to be made. According to the firm, the lag also indicates that more consumers have been shopping for themselves this season.
The expected 3.8 percent boost in holiday sales is above the 10-year average of 2.6 percent, but lower than last year’s 5.2 percent increase.
“Consumer spending this holiday season has surpassed expectations, though many shoppers continue to stick to their budgets and buy only what they need,” NRF chief economist Jack Kleinhenz said in a statement.