The National Retail Federation (NRF) is forecasting 2026 retail sales growth of 4.4% versus 2025 to $5.6 trillion.
NRF’s forecast is based on its definition of core retail sales, which excludes auto dealers, gas stations and restaurants.
The 2026 sales forecast compares with the 3.6% average annual sales growth that has occurred during the past 10 years, NRF pointed out, excluding the pandemic period from 2020 to 2022, when growth was atypical.
The sales outlook includes a divide between higher- and lower-income consumer spending, said Mark Mathews, NRF chief economist and executive director of research. Higher-income households are driving the majority of growth in spending across a range of retail categories. However, NRF expects consumer activity 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. The NRF outlook anticipates inflation remaining elevated through midyear before easing by the third quarter, offering some relief to households as 2026 progresses.
Although it sees inflation remaining above the United States Federal Reserve’s target, NRF indicated goods inflation is likely to stay within a lower band with a meaningful portion of projected sales growth coming from real gains instead of inflation-driven increases.
NRF noted labor market conditions are likely to soften with muted non‑farm employment growth throughout much of the year. Even with that, it projects the unemployment rate to remain below 4.5%. In addition, NRF observed consumer sentiment isn’t likely to improve significantly, but it indicated such sentiment has remained historically disconnected from actual spending patterns. Solid underlying fundamentals, particularly income growth, household balance sheets and labor market stability, should be enough to support continued consumer activity in 2026, the organization maintained, according to NRF.
“Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape,” 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.”
NRF President and CEO Matthew Shay added, “Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated. We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”
