Retail holiday sales this year should increase moderately, but the growth will be slower than the year before due to the “lingering effects” of stagnant wages, according to Deloitte.

In its annual sales forecast released Wednesday, Deloitte said total holiday sales are expected to climb to between $961 billion and $965 billion, representing a 3.5% to 4% increase over the 2014 shopping season.

“An improving labor market, increasing home values, and relief at the pump gave more Americans reason to believe the economic recovery was gaining real traction this year,” Deloitte’s senior U.S. economist Daniel Bachman said in a news release. “Those recurring improvements helped buoy sentiment and spending over the past several months.”

He noted that housing and employment “tend to create a more meaningful wealth effect” than the financial markets, so “the recent stock market fluctuations and instability overseas should not have a marked impact on shoppers’ holiday spending intentions.”

However, the expected growth rate is below last year’s 5.2% gain over 2013 holiday sales. Bachman said that may reflect the lingering effects of flat personal income growth in the first quarter.

Deloitte forecasts an 8.5% to 9% increase in online and mail-order sales during the 2015 holiday season, with 64%, or $434 billion, of retail store sales being impacted by shoppers’ use of digital devices.

“Nearly 80% of shoppers say they engage with a retailer or brand through digital channels before setting foot inside the store,” said Rod Sides, Deloitte’s retail and distribution sector leader.

“Retailers that are likely to come out ahead this holiday season are the ones connecting the dots between their digital channels and their stores — rather than focusing solely on the online ‘buy’ button,” he predicted.

Other forecasts for holiday store sales are more conservative. ShopperTrak expects a 2.4% increase, though online sales weren’t included in that forecast, and AlixPartners forecasts 2.8% to 3.4% sales growth.

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