Oct. 6--The National Retail Federation, usually the eternal optimist when it comes to predicting holiday sales, today did something it has never done before -- issued a forecast saying Americans will spend less this holiday season than last year.

The retail trade group is predicting sales will decline 1 percent, to $437.6 billion. Last year, the NRF forecast sales would increase 2.2 percent, only to see them fall 3.4 percent. The forecast covers sales in November and December.

Until last year, holiday sales rose every year, in both weak and strong economies, since the NRF began issuing holiday forecasts in 1992. In boom years like 1999, they climbed 8.1 percent over the previous year. In weak years, such as 2002, they gained a mere 1.3 percent.

"It's not a secret that the consumer's not back yet," said NRF spokesman Scott Krugman. "They're going to take a little bit of that frugality that we've seen into the holidays with them.

"We're going to need a little bit more time before the consumer is back, and I have a feeling that's going to correspond with the unemployment rate," Krugman said. That may take some time. The Labor Department reported the unemployment rate rose to a 26-year high of 9.8 percent on Friday, and some economists believe it will top 10 percent before the job market recovers.

The good news, Krugman said, is that the percentage decline in holiday sales will be less than last year. Retailers, he said, are bracing for another challenging season. "It's eyes wide open. Between staffing, the inventories that they are bringing to the shelf, they are prepared for this, so that's going to minimize the impact on profits, which is a good thing."

"There certainly could be a fourth-quarter surprise, but you have to go with the data that we have right now," which indicates a 1 percent drop, he said. However, he added, "consumers have surprised us before," noting that there is a lot of pent-up demand for merchandise.

C. Britt Beemer, chairman of America's Research Group, which surveys shoppers about their spending, said his holiday forecast, to be released in November, will probably predict an even greater drop in sales. "Right now, my instinct is that we're going to be looking at minus 3.5 percent or minus 5 percent," Beemer said. Consumers are telling him that they aren't even thinking about Christmas yet, and haven't started planning their holiday budgets.

"The consumer is being bombarded with more challenges than ever before," Beemer said, adding that the resulting pressures on retailers are "well, well beyond what I've ever seen before."

E-mail: verdon@northjersey.com

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