Holiday sales forecast grows for 2011

Despite showing that consumers plan to spend less this holiday season, a National Retail Federation (NRF) survey forecasts 2.8 percent growth in retail holiday sales this year.

The NRF's survey shows that holiday shoppers intend to spend an average of $704.18 on holiday gifts and seasonal merchandise in 2011, down slightly from the average of $718.98 in 2010. But the NRF is still forecasting that November and December retail sales will grow over last year to $465.6 billion.

According to NRF, retail contributes $2.5 trillion to the annual U.S. gross domestic product, making it a "daily barometer for the nation's economy."

According to the NRF, about six in 10 holiday shoppers (59.9 percent) plan to take advantage of retailers' sales to make non-gift purchases during the holiday season. The average person will spend $130.43 on sales for themselves or a family member, up from $112.20 in 2010.

The economy's impact

According to the NRF survey, 62.2 percent of Americans say the economy will affect their holiday spending plans.

Consumers are expected to compensate by comparison shopping more frequently. According to the survey, 5.7 percent said they would comparison shop using their mobile device more often, up from 3.7 percent in 2010. Nearly one-third--32 percent--will comparison shop online more often, up from 30.9 percent last year.

Americans have embraced both online banking and online shopping in recent years. Nearly half (46.7 percent) of those surveyed will buy their holiday gifts online, compared to 43.9 percent in 2010, and the average online shopper will spend about 22 percent more than the people who shop in person.

Will the economy benefit?

Economists and financial experts watch retail sales closely to determine whether the U.S. economy is improving. If the retail sector shows strength and other economic indicators also improve, the Federal Reserve may begin begin to consider raising interest rates.

Since December 2008, the Federal Reserve has kept the federal funds rate, which banks use for short-term lending, near zero. If the Federal Reserve raises the federal funds rate, financial institutions are likely to offer better interest rates on online savings accounts, CDs and money market accounts.

It remains to be seen whether the NRF's predictions will come true, but if they do, better interest rates on deposit accounts could be ahead.