Most economic signs so far this year point to the 10th year in a row that national retail sales will increase. In recent days, the National Retail Federation has forecasted sales growth between 3.8 percent and 4.4 percent by the end of the year.
There are a few warning signs, but fundamentally, the economy is in good shape, says NRF’s Chief Economist Jack Kleinhenz.
“We are not seeing any deterioration in the financial health of the consumer,” Kleinhenz said in NRF’s latest annual economic outlook. “Consumers are in better shape than any time in the last few years.”
Kleinhenz pointed to the strong job market marked by low unemployment as a key driver for the economy. It ensures the continued health of what has been strong consumer confidence.
This year’s forecast rests upon economic steam from 2018, when preliminary NRF estimates show that national retail sales grew 4.6 percent, to nearly $3.7 trillion. The growing popularity of online shopping helped in the results by increasing 10.4 percent to nearly $683 billion.
Despite its optimism for the year, NRF warns that Wall Street and government uncertainties could temper sales results. Kleinhenz mentioned current trade wars with China that have resulted in tariffs that raise prices; resulting stock market volatility; and government shutdowns or such threats related to U.S. immigration policy. NRF already has forecasted a slight slowdown in new job creation this year, from current gains of 4 percent per month to 3.5 percent per month by the end of the year.
Overall, though, Kleinhenz does not think threats to the economy will reverse projections for another solid year.
“The bottom line,” he said, “is that the economy is in good shape despite the ups and downs of the stock market and other uncertainties. Growth remains solid.”