The National Retail Federation said the future looks brighter for the US economy in the second half of 2001, with the lowering of interest rates by the Federal Reserve kick starting the turnaround.

Rosalind Wells, NRF chief economist, said apparel was one of the sectors likely to benefit, with an increase of 3.2 per cent predicted for 2001.

She said consumer spending is being boosted by tax rebate cheques the IRS began mailing last week. "Consumers, who have been keeping the economy moving ahead, will be in even better financial shape to accelerate spending," she said.