Dive Brief:

• The National Retail Federation on Wednesday released its projections for 2018 holiday sales, the organization forecasting total sales of between $717.5 billion to $720.9 billion. That represents a 4.3% to 4.8% increase over last year's sales of $687.9 billion, which were a 5.3% increase over 2016.
• The organization also expects seasonal hiring to increase, with 650,000 seasonal hires expected for 2018, a more than 11% increase from hiring in 2017.
• The holiday sales estimates were in line with the NRF's forecast of a 4.5% year-over-year increase in total retail sales for 2018, the organization said.

Dive Insight:

At a Wednesday event releasing the organization's forecasts, NRF President and CEO Matthew Shay heaped praise on "the economy, the health of consumers [and] the overall state of retail."

Specifically, he pointed to relatively low inflation, low unemployment and wage gains (much of which have been offset by price increases throughout the economy, as some media have reported).

Shay also praised last year's tax cuts, which he said have had "real" and "animal spirit" effects throughout the economy. He acknowledged, though, that there's not much data yet showing benefits from the tax cuts going to general consumers."Some people aren't going to see that until filing next year," he said.

NRF Chief Economist Jack Kleinhenz said Wednesday that "we rarely see so many economic gauges so strong." He and Shay did, however, point to a couple potential headwinds, namely tariffs and gas prices. Kleinhenz said that the Trump Administration's announced tariffs on Chinese goods could "impact the producer, retailer and consumer," with larger retailers that have more scale better positioned to weather the tariffs than smaller players.

NRF's numbers are largely in line with estimates from other observers. Forecasts from Coresight Research project a 4% increase in holiday sales over last year. Deloitte's number crunchers put that even higher, estimating sales growth between November and January to reach 5% to 5.6% from last year. AlixPartners has pegged the potential increase at 3.1 to 4.1%.

Expectations for e-commerce outpace even those healthy numbers: Coresight thinks online retail sales will rise by almost 16% year over year, while Deloitte foresees an increase of 17% to 22%, up to as much as $128 billion to $134 billion.

But tariffs could have at least a partial spoiling effect on the party. The University of Michigan's Survey of Consumers found its consumer sentiment score dropping to 100.1 this week, from 100.8 earlier in September (but still only the third time since January 2004 that it topped 100). The survey's chief economist, Richard Curtin, told Retail Dive earlier this fall, "Concerns about the negative impact of tariffs were cited by nearly one-third of all consumers in September."

AlixPartners, meanwhile, found that 48% of consumers it surveyed said they would switch brands if tariffs hike prices more than 10%, according to a press release.