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NRF forecasts 3.4% sales growth in 2012

The National Retail Federation projects total retail sales to grow this year by 3.4% to $2.53 trillion. Last year, sales grew 4.7%.

NRF expects high unemployment and uncertainty over jobs to hold back a better rate of growth.

NRF added that many economists estimate that real U.S. gross domestic product will rise approximately 2.1% to 2.4% this year.

"Over the last 18 months, retailers have been on the forefront of the economic recovery - creating jobs, encouraging consumer spending, and investing in America," said NRF president and ceo Matthew Shay.

NRF is advocating for the federal government to level the playing field between brick-and-mortar and online retailers on the subject of sales taxes (Internet retailers are not required to collect state sales taxes) and reforming the visa system so more foreign travelers can come to the U.S. to spend money.

Shay and NRF's chairman, Terry Lundgren, who is Macy's chairman, president and ceo, together outlined the industry's priorities in a letter to President Obama last week.

A number of factors contributed to NRF's 2012 economic forecast, including:

+ Employment: NRF notes: "The number of Americans out of work is at its lowest level in nearly three years, and the rise in employment and hours worked should bolster income and spending."

+ Income growth: Modest income growth continues to dampen consumer spending, according to the NRF. The organization is urging Congress to extend the cuts in payroll taxes and unemployment benefits beyond the two-month window it already approved.

+ Housing: NRF expects home sales and construction will improve slightly in 2012 with low interest rates and affordability at an almost 30-year high.

+ Inflation: NRF expects inflation to slow down near a 2% but cautioned that rising gas prices may put pressure on spending.

+ Consumer credit: NRF believes recent easing of standards for lending and revolving credit indicates consumers have confidence to take on debt.

+ Consumer confidence: NRF still sees this measure as "fragile."

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