RAPAPORT... US retail sales will grow 3.5% to 4.1% this year, despite trade tensions and the spreading coronavirus epidemic, according to the National Retail Federation (NRF).
“The nation’s record-long economic expansion is continuing, and consumers remain the drivers of that expansion,” NRF CEO Matthew Shay said Wednesday. “With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead.”
While underlying uncertainty is a factor, economic growth will continue to flourish, he predicted.
“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,” Shay said.
The organization expects total sales for the year of $3.93 trillion to $3.95 trillion, while online purchases are expected to reach between $870.6 billion and $893.9 billion — a 12% to 15% increase.
Preliminary estimates show retail sales last year grew 3.7% to $3.79 trillion, just short of the NRF’s forecast of at least 3.8% growth. That figure was based on incomplete data due to the government shutdown during part of the period. Online purchases increased 13% to $777.3 billion.
“The economy is growing at a more modest pace, but the underlying economic fundamentals remain in place and are positive,” said NRF chief economist Jack Kleinhenz. “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.”
The NRF expects the unemployment rate to drop to 3.5% from 3.6% last year, and predicted the country’s gross domestic product (GDP) would grow 1.9%.
However, the NRF cautioned its forecast assumed that coronavirus would not become a pandemic, noting that business confidence and retail sales could be impacted if factory shutdowns in China continue, particularly if those closures affect delivery of holiday-season merchandise.
Image: A couple shopping at the mall. (Shutterstock)
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