U.S. retail sales should rise 3.4 percent this year, down from 4.2 percent growth in 2012, as higher payroll taxes cut into discretionary spending for consumers, the world's largest retail trade association said on Monday.
The forecast assumes lower inflation and continued slow job growth, the National Retail Federation said.
Consumer spending is likely to be weighed down by a 2 percent increase in payroll taxes this year, while many workers are also expected to pay more out of pocket for healthcare this year as new healthcare regulations take effect.
"I think we can safely predict that many people are going to be shopping for price more often and there may be some trading down," NRF President and Chief Executive Matthew Shay said.
The forecast would be the lowest growth in three years.
The NRF forecast includes sales at most traditional retail categories including non-store, auto parts and accessories stores, discounters, department stores, grocery stores and specialty stores, and excludes sales at automotive dealers, gasoline stations and restaurants.
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