Despite a tumultuous backdrop, the underlying U.S. economy is sound and will support retail sales growth of 3.8 to 4.4 percent this year, the National Retail Federation (NRF) has projected.
The high range of the forecast would nearly match last year’s 4.6 percent growth.
“More people are working, they’re making more money, their taxes are lower and their confidence remains high,” said Matthew Shay, president/CEO of the retail trade group.
But he cautioned against “self-inflicted wounds” from “artificial problems” like trade wars and government shutdowns, which could derail retail momentum. While merchants have been able to largely mitigate the impact of new tariffs on steel, aluminum and Chinese imports, a scheduled March 1 increase on $200 billion in Chinese goods, from 10 percent to 25 percent, could raise the price of electronics, appliances and other consumer products and adversely impact business direction and profits, Shay said.
Total 2019 retail sales are projected to hit about $3.8 trillion, based on 2018 Commerce Department data and NRF’s own December estimates. Of that, upwards of $765 billion would be transacted online, assuming e-commerce continues to grow at the same 10-12 percent rate as last year.
Echoing Shay, the trade group’s chief economist Jack Kleinhenz said “Consumers are in better shape than any time in the last few years,” and will likely continue to spend thanks to low inflation, interest rates, unemployment and gas prices.
NRF is on Capitol Hill today along with more than 100 businesses and other trade associations as part of a “Tariffs Hurt the Heartland” campaign to push for continued trade negotiations with China.
The group is also urging Congress to focus on areas of common ground — including immigration reform, infrastructure investment and consumer privacy — in response to President Trump’s State Of The Union speech on Tuesday. “It’s time … to focus on prosperity not politics,” Shay said.