As the economy improves and job prospects brighten, consumers are once again heading for the mall. The National Retail Federation (NRF) predicts that GAFS sales (sales of general merchandise, apparel, furniture and sporting goods) will increase 5.0 percent from last year. According to its Retail Sales Outlook Report, NRF projects that gains in consumer income and low inflation will contribute to growth in 2004.

"This year will see more balanced economic growth with solid consumer spending and accelerating business investment," says NRF chief economist Rosalind Wells. "As employment expands and wages and salaries firm, a broader spectrum of consumers will be in better financial shape, which should help lift sales more evenly across the board."

Forecasters expect growth to build on the momentum that began to gather in the last six months of 2003. "In the second half of 2003, consumers played their part with hefty spending increases and businesses kicked in with strong investment spending," says Wells. "Even government spending and trade contributed to the economic party."