WASHINGTON — The National Retail Federation (NRF) forecasts modest sales gains this holiday season, projecting a 3.9% advance in November and December to $602.1 billion. The prediction is higher than the 10-year average of 3.3% and last year’s 3.5%.

The National Retail Federation (NRF) forecasts modest sales gains this holiday season, projecting a 3.9% advance in November and December to $602.1 billion. The prediction is higher than the 10-year average of 3.3% and last year’s 3.5%.

"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," said NRF president and chief executive officer 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; without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence," Shay added early this month.

Economic variables including growth in the U.S. housing market and increased consumer appetite to buy larger-ticket items give retailers reason to be cautiously optimistic for solid holiday season gains. However, much remains up in the air, including fiscal concerns around the debt ceiling and government funding, income growth, and even policies and actions surrounding foreign affairs, all of which could impact holiday sales. According to NRF, the holiday season can account for anywhere from 20% to 40% of a retailer’s annual sales, and around 20% of total industry annual sales.

"The economy continues to expand, albeit at an unspectacular pace," said NRF chief economist Jack Kleinhenz. "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 American consumers 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. It includes the non-store category (direct-to-consumer, kiosks and online sales).

Shop.org expects online holiday sales to grow 13% to 15% to as much as $82 billion. "Online and mobile continue to be a leading area of growth for retailers," noted Shay. "In this economy savvy, cost-conscious consumers go to the Web to do their research and get the best bang for their buck."