NRF says consumers continue to drive economy

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Forecasts retail sales to grow 3.5% to 4.1%.  

WASHINGTON — Retail sales should grow by 3.5% to 4.1% this year, according to a forecast released Wednesday by the National Retail Federation.The trade group is forecasting that sales in 2020 will top $3.9 trillion, despite uncertainty from the lingering trade war, the coronavirus outbreak and the presidential election.

“The nation’s record-long economic expansion is continuing, and consumers remain the drivers of that expansion,” NRF president and CEO Matthew Shay said. “With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead. There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way.”

NRF said that preliminary data indicates that retail sales during 2019 grew 3.7% over 2018 to $3.79 trillion. That gain was just short of the 3.8% increase the NRF had forecast. The total includes online and other non-store sales, which were up 12.9% at $777.3 billion, beating NRF’s forecast of up to 12 percent growth. The numbers exclude automobile dealers, gasoline stations and restaurants.

For 2020, the NRF is predicting that retail sales should total between $3.93 trillion and $3.95 trillion. Online sales, which are included in the total, are expected to grow between 12% and 15% to between $870.6 billion and $893.9 billion.

NRF expects the overall economy to gain between 150,000 and 170,000 jobs per month in 2020, compared with an average 175,000 in 2019. Unemployment – currently at 3.6% – is projected to stay around 3.5%. Gross domestic product is expected to grow 1.9% this year, down from preliminary estimates of 2.3% in 2019.

“The economy is growing at a more modest pace, but the underlying economic fundamentals remain in place and are positive,” NRF chief economist Jack Kleinhenz said. “Consumers remain upbeat and have the confidence to spend, and the steady wage growth that has come with the strong job market is fueling their spending. The state of the consumer is very healthy.”

Kleinhenz noted that consumer confidence is high, but corporate CEOs remain cautious over trade policy. The impact coronavirus is another question mark — NRF’s forecast assumes that the outbreak does not become a global pandemic, but business confidence and retail sales could be hurt if factory shutdowns in China continue, particularly if they affect the delivery of merchandise in advance of the holiday season.


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