Despite the economic side effects of Hurricanes Katrina and Rita, 2005 holiday sales should be relatively healthy, according to Retail Forward Inc. (Columbus).

Retail Forward forecasts a 5 percent increase in the fourth quarter for key retail sectors—general merchandise stores such as conventional and discount department stores, supercenters, warehouse clubs, apparel stores, furniture, home furnishings, consumer electronics and other specialty stores. This is a bit lower than the 5.4 percent gain last year, but on par with the average holiday growth rate since 1990.

“Persisting gains in jobs and incomes are the key driver of this year’s expected fourth-quarter growth,” said Steve Spiwak, a Retail Forward economist. “Holiday sales also will be shaped by a demand for homes and home goods that will remain elevated while energy prices—buoyed by the impact of the recent hurricanes—and debt loads will continue to drag on growth, particularly for lower-income households.”

Sales at supercenters and warehouse clubs should continue to outpace most other retail channels this holiday season as value-oriented consumers looking to get the most for their money and new stores drive growth.

Other indicators indicate that consumer confidence is rising. The RBC Consumer Attitudes and Spending by Household Index was 0.9 in October, up more than 14 points from its record low of -13.5 in September.

“The end of the American consumer seems to have been greatly exaggerated,” said Vince Boberski, chief economist for RBC Dain Rauscher. “Images from the Gulf hurricanes still linger, and filling up your tank still takes a bite out of the pocketbook. But some moderation in oil prices and continued solid underlying conditions in the labor market have begun to point toward a brighter holiday season than many would have predicted just one month ago.”

Still, Boberski cautioned, that could change when homeowners see their first heating bills, which will reflect elevated prices for natural gas and home heating oil.

The RBC CASH Index, conducted by Ipsos Public Affairs (Washington), is a monthly national survey of consumer attitudes on the current and future state of local economies, personal financial situations, savings and confidence to make large investments.