The National Retail Federation (NRF) has announced that it expects holiday retail sales in November and December — excluding automobiles, gasoline and restaurants — to increase between 4.3 and 4.8% over 2017 for a total of $717.45 billion to $720.89 billion. The forecast compares with an average annual increase of 3.9% over the past five years.

“Our forecast reflects the overall strength of the industry,” NRF president and CEO Matthew Shay said. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

Holiday sales in 2017 totaled $687.87 billion, a 5.3% increase over the year before and the largest increase since the 5.2% year-over-year gain seen in 2010 after the end of the Great Recession.

“Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF chief economist Jack Kleinhenz said. “With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”

The holiday forecast is consistent with NRF’s forecast that annual retail sales for 2018 will increase at least 4.5% over 2017.

NRF’s holiday forecast is based on an economic model using several indicators including consumer credit, disposable personal income and previous monthly retail sales. The number includes online and other non-store sales.