Holiday retail sales in 2011 will increase 2.8 percent to $465.6 billion, according to a forecast by the National Retail Federation.

The growth is lower than the 5.2 percent increase retailers experienced last year, but it is slightly higher than the 10-year average holiday sales increase of 2.6 percent.

“Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,” said NRF president and CEO Matthew Shay in a statement. “While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.”

According to the forecast, although several economic indicators paint a solid picture for the holiday season—including 14 consecutive months of retail sales growth and a substantial reduction in household debt—continued consumer uncertainty over the stock market, higher gas and food prices, fiscal policy, and sputtering job growth will impact spending this holiday season.

“Just when you think the U.S. economy is turning around, another factor comes into play that changes the game,” said NRF chief economist Jack Kleinhenz, Ph.D, in a statement. “Persistently high unemployment, an erratic stock market, modest income growth, and rising consumer prices are all combining to impact spending this holiday season. How Americans will react to shaky economic data is the question, but the good news for retailers is that shoppers have not yet thrown in the towel.”

For the first time this year, NRF used its holiday forecasting model to create a projection for seasonal hiring in retail. According to NRF, retailers are expected to hire between 480,000 and 500,000 seasonal workers this holiday season, which is comparable to the 495,000 seasonal employees they hired last year.

“The hundreds of thousands of jobs created during the holiday season help people support their families by supplementing their household income and providing generous employee discounts,” said Shay in a statement. “As the retail industry bounces back from the recession and continues to add jobs, some holiday employees could find themselves with an opportunity for even more: a new career in one of the most innovative industries on the planet.”

NRF’s holiday sales forecast is developed based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income, and previous monthly retail sales releases.

JCK