by Calculated Risk on 10/06/2009 08:50:00 AM

From the National Retail Federation: NRF Forecasts One Percent Decline in Holiday Sales

The National Retail Federation today released its 2009 holiday forecast, projecting holiday retail industry sales to decline one percent this year to $437.6 billion.* While this number falls significantly below the ten-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales ...

“The expectation of another challenging holiday season does not come as news to retailers, who have been experiencing a pullback in consumer spending for over a year,” said NRF President and CEO Tracy Mullin. “To compensate, retailers’ focus on the holiday season has been razor-sharp with companies cutting back as much as possible on operating costs in order to pass along aggressive savings and promotions to customers.”

* NRF defines “holiday sales” as retail industry sales in the months of November and December. Retail industry sales include most traditional retail categories including discounters, department stores, grocery stores, and specialty stores, and exclude sales at automotive dealers, gas stations, and restaurants.

Notice the focus on cost controls, and that suggests retail hiring for the holiday season will be weak.

Here is a repeat of a graph from a post a couple weeks ago: Retail Hiring Outlook "Jobs Scarce"

Click on graph for larger image in new window.

Typically retail companies start hiring for the holiday season in October, and really increase hiring in November. This graph shows the historical net retail jobs added for October, November and December by year.

Based on the NRF forecast, seasonal retail hiring might be around 400 thousand again in 2009.

More from Ylan Mui at the WaPo: Retailers Hope for Holiday Cheer

The retail federation's forecast "is a good number in that it shows stabilizing in sales," NRF spokesman Scott Krugman said. "However, it also acknowledges that the recovery is not going to be consumer-led."

Typically recoveries are consumer led, and then the increase in end demand eventually leads to more business investment. Not this time. Just another reminder that the typical engines of recovery are still misfiring.