While consumers have shown a surprising amount of resilience in 2006, retailers can expect a more subdued holiday season this year, according to the National Retail Federation (NRF). Total holiday retail sales are expected to increase 5% over last year, bringing holiday spending to $457.4 billion, the group said. In comparison, holiday sales in 2005 rose 6.1% to $435.6 billion.

“Consumers have faced a number of economic challenges this year and have taken them in stride,” said NRF Chief Economist Rosalind Wells. “Although sales gains will not be as robust as last year, retailers can still expect above-average holiday sales growth.”

Over the last 10 years, the average percentage increase in sales for the holiday season is 4.6%. One-fifth of retail industry sales (19.9%) occur during the holiday season, making it the most important time period of the year for the industry.