An influential retail trade group raised its forecast for U.S. holiday retail sales on Thursday, citing strong results in November and expectations that consumers still have more shopping to do.
The National Retail Federation said it now expects holiday sales to rise 3.8 percent to a record $469.1 billion. That is up from the group's October forecast, which called for growth of 2.8 percent.
The new forecast is still lower than the 5.2 percent growth seen last year, but is above the 10-year average increase of 2.6 percent.
"Consumer spending this holiday season has surpassed expectations, though many shoppers continue to stick to their budgets and buy only what they need," said NRF Chief Economist Jack Kleinhenz in a statement.
The holiday shopping season, which kicks off unofficially after the U.S. Thanksgiving holiday, is critical for retailers from Wal-Mart Stores Inc (WMT.N) to Best Buy Co Inc (BBY.N) to Gap Inc (GPS.N).
The reason for the updated forecast is that NRF, a retail industry trade group, found that industry sales for November rose 4.5 percent year-over-year, and that the average American has completed far less of their holiday shopping than in previous years -- an indication that many shoppers bought for themselves in November and have lots of shopping left to do.
While retailers are "cautiously optimistic" that the season will turn out better than initially expected, NRF President Matthew Shay said "a number factors, including the debt crisis in Europe and continued political wrangling in Washington, could impact consumer spending this holiday season and into 2012."
The NRF's figures compare sales at retail stores with the year-earlier period and exclude restaurants, gasoline, automobiles and online sales.
That is why its results look different than those announced by the U.S. Commerce Department, which said U.S. retail sales grew a weaker than expected 0.2 percent in November.
(Reporting By Martinne Geller in New York, editing by Matthew Lewis)