Holiday sales forecast to jump 4.3 to 4.8 percent

The nation's top retail industry group on Wednesday forecast that holiday sales will rise 4.3 percent to 4.8 percent this year compared to last year even as it acknowledged risks of an escalating trade war.

"Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we've seen over the past year," National Retail Federation chief executive Matthew Shay said in a statement.

In its annual prediction, the NRF said combined in-store and online purchases at the nation's retail stores will ring up between $717.5 billion and $721 billion this season.

The forecast is based on an economic model that includes consumer credit, disposable personal income and previous monthly retail sales.

In 2017, holiday sales rose 5.3 percent over the previous year, the highest year-over-year jump since 2010 and the end of the Great Recession. Those results outpaced NRF's expectations and were fueled by growing wages and stronger employment, which continue to be a driving factor.

"We continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy," NRF's chief economist Jack Kleinhenz said. "The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend."

A host of the nation's retail giants posted record-setting sales growth in the second quarter, including Minnesota's Target Corp. and Best Buy Co. Inc.

Target had its largest jump in 13 years, spiking 6.5 percent in the second quarter. Best Buy's sales were up 6.2 percent, its largest in 15 years.

Shoppers similarly rewarded Walmart, Kohl's and TJX with big gains as the retail season was heating up for the busy back-to-school and holiday shopping seasons.