Retailers will boost their holiday hiring over last year’s levels but are once again unlikely to match pre-recessionary job-addition peaks.

Holiday payroll additions this year “could approach 700,000,” said John Challenger, chief executive officer of Challenger, Gray & Christmas, in the Chicago-based outplacement firm’s annual forecast for fourth-quarter hiring. That would be above the 660,200 positions added last year, when seasonal hiring was up 1.9 percent while still below the average of 722,000 posts added from 2004 to 2007 prior to the recession.

“There is still too much uncertainty to expect seasonal employment gains to reach the level we saw in 2006, when retailers added nearly 747,000 extra workers at the end of the year,” said Challenger. “We may never again reach the level of hiring achieved in 1999, at the height of the dot-com boom, when nearly 850,000 season workers were added.”

An energetic start to last year’s holiday season rendered the firm’s prediction for 2011 a bit too conservative. CG&C initially expected holiday hires to be “about the same or possibly lower” than the 647,600 positions added for holiday 2010. Hiring slumped from year-ago levels last October and December but climbed more than 43,000, to nearly 383,700, in November, enough to cover declines in the two adjacent months and propel holiday hires well above the 2010 level.

The forecast comes as major retailers and affiliated service companies begin to reveal their head count expectations for the end of the year. Target Corp. plans between 80,000 and 90,000 hires for the season while Kohl’s Corp.’s projection of 52,700 was 12,700 above its plans for last year. Wal-Mart Stores Inc. plans to add 50,000 workers, slightly more than last year, and extend the hours of many associates already on staff.

“The economy has continued its slow recovery and surveys of retailers show that they are hopeful for solid sales gains this year,” said Challenger. “However, recent consumer confidence readings have been relatively weak and unemployment remains stubbornly high.”

That could translate into cautious hiring, and only after early signs of strength in holiday spending. Among positive trends, the Challenger forecast cited a 1.8 million worker increase in total payroll employment in August compared to the prior-year month and growth to $773 from $756 in median weekly earnings during the second quarter of this year compared to last.

Last year, general merchandise stores, the single biggest seasonal job creators, added 308,600 workers during the holiday season, 229,000 alone for department stores. Apparel and accessories stores were second with 195,100 new positions.