The National Retail Federation, the nation’s largest retail trade group, forecasts that retail sales should grow between 3.8 and 4.4% to more than $3.8-T this year as shoppers remain in the mood to spend in a strong US economy and job market.
The forecast, released Tuesday, is in line with the 4.6% gain the group preliminarily estimated for Y 2018 pending the release of December data from the US Commerce Department that was delayed because of the government shutdown. The figures exclude sales from automobile dealers, gas stations and restaurants.
The trade group acknowledges that an ongoing trade dispute with China could threaten this year’s growth. The current forecast does not take into consideration the set of tariffs on $200-B in Chinese products rising to 25% from 10% as scheduled for 1 March. The group says the impact of the government shutdown had little effect on spending last month.
“We canot get too hung up on noise … The truth is that the consumer continues to be in a very good place,” said the trade group’s President and CEO in a press briefing Tuesday
He said that the biggest priority is to ensure the economy continues to grow and to avoid “self-inflicted wounds.”
“It’s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity, not politics,” he added.
While stores like Sears face an uncertain fate, lots of others are seeing robust sales helped by their own reinvention efforts like speeding up deliveries and adding robots to relieve workers of menial tasks, as well as a solid economic backdrop.
NRF expects overall economy to gain an average of 170,000 jobs per month, down from 220,000 in Y 2018 and that unemployment will drop to 3.5% by year-end. It said that GDP is likely to increase about 2.5% over Y 2018. Economic growth reached 3.8% last Spring and Summer, the fastest 6-month pace in 4 years.
The Chief economist at the trade group, expects retailers will continue to increase wages but that will not necessarily translate into inflation.