The National Retail Federation (NRF) predicts that retail sales this year will increase between 3.8 percent and 4.4 percent to reach more than $3.8 trillion, despite threats from a trade war with China and the recent government shutdown.
“We believe the underlying state of the economy is sound,” NRF President and CEO Matthew Shay said in a press release. “More people are working, they’re making more money, their taxes are lower and their confidence remains high. The biggest priority is to ensure that our 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.”
Preliminary estimates show that last year's retail sales grew 4.6 percent to $3.68 trillion, exceeding NRF’s forecast. The Federation is now predicting that there will be growth in 2019 of between 3.8 percent and 4.4 percent, to hit between $3.82 trillion and $3.84 trillion. Based on growth of 10 to 12 percent, online sales are expected to be between $751.1 billion and $764.8 billion.
“We are not seeing any deterioration in the financial health of the consumer,” said NRF Chief Economist Jack Kleinhenz. “Consumers are in better shape than any time in the last few years. Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy. The bottom line is that the economy is in a good place despite the ups and downs of the stock market and other uncertainties. Growth remains solid.”
In addition, the overall economy is set to gain an average of 170,000 jobs per month, a decrease from the 220,000 in 2018. Unemployment – currently at 4 percent – will drop to 3.5 percent by the end of the year.
And while retailers have been able to handle the new tariffs on goods from China imposed in the past year, they could ultimately drive up the cost of consumer products and affect profits in 2019.