Oct 15 (Reuters) - U.S. holiday sales are expected to

grow as much as 3.5%, the slowest pace in six years, the

National Retail Federation forecast on Tuesday, as shoppers turn

more frugal and get picky with spending on non-essentials.

Holiday sales are set to rise between $979.5 billion and

$989 billion from November to December, the retail industry

group (NRF) projected. That compared to 3.9% growth to $955.6

billion last year.

Retailers are expected to hire between 400,000 and 500,000

seasonal workers this year, compared with 509,000 in 2023, the

group said.

NRF remains optimistic about the pace of economic activity

and growth projected in the second half of the year, said NRF

Chief Economist Jack Kleinhenz.

"Household finances are in good shape and an impetus for

strong spending heading into the holiday season, though

households will spend more cautiously," he said.

Consumers are limiting their spending and opting for cheaper

alternatives for categories ranging from groceries to apparel,

forcing companies to lower prices and offer more discounts.

Online and other non-store sales are expected to expand up

to 9% to $297.9 billion, compared with $273.3 billion in 2023,

as per the retail industry group's forecast.

A shorter holiday season, with only 26 days between

Thanksgiving and Christmas, has forced retailers including

Walmart ( WMT ), Target ( TGT ) and Amazon ( AMZN ), as well as

China's Shein and PDD Holdings' Temu, to introduce early

deals.

Deloitte has also forecast 2024 holiday sales to grow at

their slowest pace in six years due to cautious shopping.