Political uncertainties and fears over the "fiscal cliff," a combination of spending cuts and tax increases, could drag down holiday spending, according to the National Retail Federation's (NRF) annual holiday forecast. 

Holiday sales are expected to increase 4.1 percent to $586.1 billion. Holiday sales in 2011 grew 5.6 percent. 

"In spite of the uncertainties that exist in our economy and among consumers, we believe we'll see solid holiday sales growth this year," said NRF President and CEO Matthew Shay. 

NRF's holiday sales forecast is based on an economic model using several indicators including consumer confidence, consumer credit, disposable personal income and previous monthly retail sales releases.

Additionally, online holiday sales are forecast to reach $96 billion, a 12 percent increase from last year, according to Shop.org. The U.S. Department of Commerce estimates 2011 fourth quarter e-commerce sales increased 15 percent.

NRF expects seasonal employment to grow between 585,000 and 625,000, which is comparable to the 607,500 seasonal employees hired last year.