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Despite escalating uncertainty here and abroad, the National Retail Federation is predicting that retail sales in 2026 — unadjusted for inflation and excluding automotive dealers, gas stations and restaurants — will grow 4.4% year over year to $5.6 trillion.

The forecast outpaces most past calculations from the NRF, including last year’s guidance for slower consumer spending, its measure of growth under 4% at year’s end and the 3.6% average annual growth it has clocked for the last decade. In 2025, based on NRF analysis that leverages credit- and debit-card data, retail sales grew to $5.4 trillion and holiday sales topped $1 trillion, NRF CEO Matthew Shay said Wednesday, during the group’s annual State of Retail and the Consumer virtual event.

This year the NRF used a new economic yardstick, partnering with advisory firm Oxford Economics for the first time; in previous research Oxford Economics said the U.S. economy this year would exceed consensus expectations, in part thanks to fading tariffs impacts and “wide corporate profit margins.”

For the bullish guidance, the report largely counts on the kind of consumer resilience that has been buoying retail sales even in the face of financial worries — supported by “underlying fundamentals” in the U.S. economy and boosted by higher tax refunds expected this year. The group brushed aside concerns about consumer confidence, which is low and not expected to improve much, saying that “sentiment has remained historically disconnected from actual spending patterns.”

The estimate does take into account a weakening U.S. labor market, persistent inflation and disruptive trade policies. The NRF had answers to some of that, noting that despite muted job growth, unemployment is expected to stay under 4.5% and that goods inflation would be lower than services inflation.

The Iran war is not factored in, according to NRF Chief Economist Mark Mathews.

“It is important to acknowledge the challenges posed by the ongoing tensions in the Middle East,” he said during the event. “There is currently too much uncertainty to factor these events into our forecast, but we will continue to assess potential impacts and issue a re-forecast if circumstances dictate.”

Other analysts this week offered a darker forecast for retailers, with Wells Fargo economists finding signs of growing consumer weakness even before war-related oil price spikes. Rising fuel costs and other household expenses, mounting credit card debt and softening employment led New England Consulting Group researchers to believe that retail sales growth this year might struggle to reach 3%. At the end of last year, Moody's Ratings said real consumer spending growth could decline to about 1.5% in 2026, though it will remain the backbone of the U.S. economy.

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