The National Retail Federation (NRF) is projecting retail sales in 2026 to increase 4.4% year over year, reaching an estimated $5.6 trillion—a forecast that was developed using an updated methodology in collaboration with Oxford Economics.
“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 projected growth exceeds the 10-year prepandemic average annual increase of 3.6%, excluding the atypical period between 2020 and 2022.
“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 US economy will support continued stability in the year ahead.”
The outlook suggests a continued divide in consumer spending, with higher-income households expected to drive the majority of retail growth. Consumer activity may receive a temporary boost in the first half of the year from larger tax refunds tied to the Working Families Tax Cut Act. Inflation is anticipated to remain elevated through midyear before easing in the third quarter.
Labor market conditions are expected to moderate, with slower job growth but an unemployment rate projected to stay below 4.5%. Although consumer sentiment is not forecast to significantly improve, NRF noted that sentiment has remained historically disconnected from actual spending behavior.
The forecast is presented in nominal terms. Although inflation is expected to remain above the Federal Reserve target, goods inflation is projected to stay relatively contained, meaning a portion of the anticipated sales increase will reflect real growth rather than price increases.
NRF’s projections are based on its definition of core retail sales, which excludes sectors such as auto dealers, gas stations, and restaurants. The organization regularly tracks retail performance and issues forecasts for key shopping periods, including the holiday season.