Holiday spending won't boost economy much

(Photo: CNN)
(Photo: CNN)

(CNN) - Retailers have modest expectations for the holiday season, as the U.S. economy remains in a funk.

Retailers anticipate a modest increase in holiday sales of 2.8 percent, totaling more than $465 billion.

This increase is less than last year's 5.2 percent, but slightly higher than the average over the last decade.

Still, this is a sign that consumers are hesitant to open their wallets more than they have to.

The National Retail Federation points to lingering consumer concerns about high unemployment, high gas prices, and the shaky stock market, the same worries consumer and retailers have adjusted to the last few holiday seasons.

"Consumers have been paying down debt, they've increased their savings rate. Retailers are able to order less merchandise in anticipation of slower demand, and plan a lot of really strong promotions for the holidays, which will bring a lot of people into stores," said Ellen Davis with the National Retail Federation.

Retailers expect consumers to be most interested in items with value, even if they have to spend a little bit more, and things that will get a lot of use.

"We're expecting that many gifts this year will focus on everyday items," Davis said.

Retailers will entice shoppers with aggressive promotions, but consumers may need to seek out popular items early. They're also keep inventories tight to keep costs down.

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