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Retailers anticipate a blue Christmas


The National Retail Federation has low expectations for the upcoming holiday season, The Washington Post reported. The industry trade group said it expects only a 2.8 percent increase in retail sales; in 2010, the holiday season brought a 5.2 percent increase.

Along with the European debt crisis and weak U.S. economic growth, a bad holiday season could increase the United States’ chances of falling into another recession.

Consumer spending makes up about 70 percent of the overall economy, and the holiday season can produce up to 40 percent of all retail sales.

The 9.1 percent unemployment rate mixed with high food and gasoline prices and a volatile stock market have left would-be shoppers at home on the couch, said Jack Kleinhenz, the federation’s chief economist.

But despite shoppers’ intentions to spend less, their outlook this holiday season is better than is was in 2009, according to the research firm Kantar Retail. Of the 4,004 people the firm polled, 35 percent said they intend to spend much less this year, compared with 43 percent in 2009.  

However, economists warn against gauging consumer sentiment this early in the season. An increase in employment could increase confidence and encourage consumers to spend more.

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