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Retail sales in 2026 are expected to grow by 4.4% over 2025 to $5.6 trillion, based on new forecasts released from the National Retail Federation in partnership with Oxford Economics. The announcement was made during NRF’s sixth annual State of Retail & the Consumer virtual event.
“Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated,” says Matthew Shay, NRF president and CEO. “We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”
This year’s forecast compares with 3.6% average annual sales growth over the last 10 years, excluding the pandemic period from 2020 to 2022, when growth was atypical.
“Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape,” says Mark Mathews, NRF chief economist and executive director of research. “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.”
Larger refunds associated with tax cuts enacted under the Working Families Tax Cut Act are expected to drive consumer activity in the first half of 2026. Inflation is expected to remain elevated until the third quarter.
Labor market conditions are expected to soften, with muted non-farm employment growth throughout much of the year, but the unemployment rate is expected to remain below 4.5%.
Although consumer sentiment is not expected to improve significantly, NRF notes that sentiment has remained historically disconnected from actual spending patterns. Factors like income growth, household balance sheets and labor market stability are expected to support continued consumer activity in 2026.
