NRF Forecasts 4.4% Annual Retail Sales Growth with New Economic Model

WASHINGTON – The National Retail Federation today forecast that retail sales in 2026 will grow by 4.4% over 2025 to $5.6 trillion, based on a newly enhanced forecasting approach developed in partnership with Oxford Economics, one of the world’s leading independent economic advisory firms. The announcement was made during NRF’s sixth annual State of Retail & the Consumer virtual event, which examines the health of American consumers and the retail industry.

“Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated,” NRF President and CEO Matthew Shay said. “We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”

The 2026 sales forecast compares with 3.6% average annual sales growth over the last 10 years, excluding the pandemic period from 2020 to 2022 when growth was atypical.

“Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape,” NRF Chief Economist and Executive Director of Research Mark Mathews said. “While the geopolitical environment and ongoing trade policy challenges warrant close attention, we remain optimistic that the underlying fundamentals of the U.S. economy will support continued stability in the year ahead.”

Mathews added that the spending outlook is still bifurcated between higher- and lower-income consumers, with higher-income households driving the majority of growth in spending across a range of retail categories. Consumer activity is expected to receive a modest boost in the first half of the year from larger refunds associated with tax cuts enacted under the Working Families Tax Cut Act. Inflation is projected to remain elevated through midyear before easing by the third quarter, offering some relief to households as the year progresses.

Labor market conditions are expected to soften, with muted non‑farm employment growth throughout much of the year. Even so, the unemployment rate is projected to remain below 4.5%.

Although consumer sentiment is not expected to improve significantly, NRF notes that sentiment has remained historically disconnected from actual spending patterns. Solid underlying fundamentals, particularly income growth, household balance sheets and labor market stability, are expected to support continued consumer activity in 2026.

NRF’s forecast is presented in nominal terms, and while inflation is expected to remain above the Federal Reserve’s target, goods inflation is likely to stay within a lower band. As a result, a meaningful portion of the projected sales growth is anticipated to reflect real gains rather than inflation-driven increases.

As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season.

For frequently asked questions regarding NRF’s annual forecast, visit here.

About NRF
The National Retail Federation passionately advocates for the people, brands, policies and ideas that help retail succeed. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $5.3 trillion to annual GDP and supporting more than one in four U.S. jobs — 55 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies. nrf.com