Economists at the National Retail Federation (NRF) predict retail industry sales this year will exceed their 10-year average as the economy continues to grow and consumers show more willingness to spend. The federation forecasts sales will increase 3.1% this year, topping the 2.7% average over the previous decade. The report, released February 10, predicts non-store sales will grow between 6% and 9% in 2016.
“The economy had a bumpy ride in 2015, with fits and starts along the way,” said Jack Kleinhenz, NRF’s chief economist. “Despite the volatility, the economy continued to reduce unemployment, raise wages and actually increase real GDP by 2.4%. Lower gas prices are creating more discretionary income to save, pay down debt and spend on travel, eating out and personal services. Retailers have benefited as well, and continue to find ways to compete and succeed in a very cost-conscious environment.”
The NRF forecast includes sales in traditional retail categories — including auto parts and accessories stores, non-store categories, discounters, department stores, grocery stores and specialty stores — but excludes sales at automotive dealers, gas stations and restaurants.
NRF foresees the U.S. economy growing at between 1.9% and 2.4% this year. It expects the economy to add an average of 190,000 jobs per month and the nation’s jobless rate to fall to 4.6%.
The U.S. economy barely grew in the fourth quarter of 2015, as consumer spending cooled and exporters were hobbled by a strong dollar. Growth slowed to an annualized rate of 0.7% in the year’s final three months, down from 2% growth in the third quarter. For 2015, the U.S. economy grew at 2.4% pace, matching its 2014 pace.
Consumer spending, which accounts for roughly two-thirds of U.S. economic activity, has been a relatively bright spot in the economy. “All of the experts agree that the consumer is in the driver’s seat and steering our economic recovery,” said Matthew Shay, NRF’s president and chief executive officer.
NRF is the world’s largest retail trade association, representing discount and department stores, home goods stores, grocers, Internet merchants, wholesalers and other retailers in 45 countries.