(Bloomberg) -- US retail sales are expected to reach between $5.13 trillion and $5.23 trillion, growing 4% to 6% by the end of 2023, according to the latest forecast from the National Retail Federation. 

The NRF’s Chief Economist Jack Kleinhenz said during the group’s annual State of Retail & the Consumer event that spending for the first quarter looks “quite good” but maintained that it’s still “too early” to know the full effects of the banking industry’s turmoil.

Consumers are also faced with decades-high inflation, rising interest rates and fears of a recession. The retail sales result would be a slowdown from the 7% growth in 2022.

Even as growth is expected to pull back from the 2022 result, the NRF’s 2023 forecast remains above the pre-pandemic average annual retail sales growth rate of 3.6%. 

Increased spending in online and other non-store channels — which can include purchases made at kiosks — is expected to grow 10% to 12% from the year before to as much as $1.43 trillion in sales. Brick-and-mortar stores, though, are still the “primary point of purchase for consumers, accounting for approximately 70% of total retail sales,” according to the group.

There are caveats to the NRF’s projections, including signs of a cooling labor market, according to a panel of economists who spoke during the Wednesday event. People are also increasingly relying on credit to keep pace with inflation and economists fear that consumers will default more on their debt.

--With assistance from Janet Freund.

©2023 Bloomberg L.P.