US retail sales to grow at faster rate in 2026, NRF says

March 18 (Reuters) - U.S. retail sales are expected to rise 4.4% this year, up from 3.9% growth in 2025, industry body National Retail Federation said on Wednesday, pointing to resilient consumer spending despite persisting macroeconomic pressures.

Retailers from Walmart (WMT) to Kohl's have all taken a cautious approach for the year amid higher living costs, signs of a deteriorating labor market and rising geopolitical tensions.

Here are some key details:

* The NRF forecast sees sales climbing to $5.6 trillion, at a rate higher than the 10-year average annual growth of 3.6%, excluding the pandemic period.

* Consumer spending remained "a steady and reliable engine of growth" in 2025 even as broader economic conditions fluctuated, and is expected to stay resilient in 2026, NRF CEO Matthew Shay said.

* The forecast does not factor in renewed tensions in the Middle East, though the group said it would re-forecast if conditions worsen.

* "Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape," NRF Chief Economist Mark Mathews said.

* Labor market conditions are expected to soften, with unemployment remaining below 4.5%, while inflation is projected to stay high through mid-year before easing in the third quarter.

* NRF said consumer activity is expected 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 forecast is based on an enhanced approach developed in partnership with Oxford Economics, NRF said, and excludes purchases at automotive dealers, gasoline stations and restaurants.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)