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A pedestrian walks past a Diesel store in New York.Jin Lee/Bloomberg

A trade group raised its forecast Tuesday for retail sales growth this year to 3.4 per cent, with more help from online sales, as the economy improves.

That's up from its previous forecast of 3.1 per cent growth, he National Retail Federation said. The revision includes expected 7 per cent to 10 per cent growth in online and other non-store sales, up from its earlier 6 per cent to 9 per cent forecast.

An improving housing market, job growth, higher wages and other factors are helping consumer spending, the trade group said.

"Challenges remain, with some greater than others depending on the retail category, but consumer confidence remains high and we believe that retail customers will continue the positive trends we have seen in the first two quarters of the year," NRF President and CEO Matthew Shay said in a statement.

Potential hurdles, though, include uncertainty around the presidential election and the possibility of a global slowdown.

According to NRF estimates, retail sales in the first half of the year rose close to 4 per cent compared to a year earlier.

The NRF said it may revise its forecast in October. The group's annual estimate reflects sales retailers such as discounters, department stores and grocery stores, but excludes sales at automotive dealers, gas stations and restaurants.