Holiday season sales are projected to exceed one trillion dollars for the first time

US consumers will spend more than $1 trillion this holiday season, gifting generously despite persistent inflation, according to a forecast released Thursday.

The National Retail Federation estimated 4.2 percent growth in spending to just over $1 trillion, topping last year's rise of 3.1 percent to $972 billion.

Officials with the trade group flagged higher fuel prices as a headwind for discretionary purchases, particularly among low-income households.

But the NRF's chief economist, Mark Mathews, described the labor market as "resilient."

Consumer confidence readings have been weak, but the indicator has not proven to be a reliable predictor of sales, he said.

"We do expect households to continue to prioritize spending on families, friends and loved ones," Mathews told reporters. "We've seen that throughout the course of the year."

The NRF projects that retailers will hire between 325,000 and 375,000 temporary employees this year, a figure comparable to last year's 356,000.

But Mathews characterized this staffing addition as smaller than those "in the more distant past."

He also said retailers were unlikely to pass on all of the increased costs from shipping due to soaring diesel prices.

"I think it's really hard for any retailer to go out there and to have higher prices than anybody else," he said. "So as we saw with tariffs, this is an industry that survives on providing lower prices to consumers and potentially eating some of those costs."

The NRF's figures cover sales between November 1 and December 31 and excludes sales at automobile dealers, gasoline stations and restaurants.