NRF Raises Forecast for 2021 US Retail Sales

RAPAPORT… US retail sales will grow 10.5% to 13.5% this year as the economy rebounds at a faster rate than originally predicted, according to the National Retail Federation (NRF).

The organization expects total sales for the year to reach $4.44 trillion to $4.56 trillion, it said last week. That figure is well above the 6.5% to 8.2% increase to between $4.33 trillion and $4.44 trillion the NRF predicted in February. The federation raised its projection based on the pace of recovery compared with the start of the year.

“The economy and consumer spending have proven to be much more resilient than initially forecasted,” said NRF CEO Matthew Shay. “The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity have put millions of Americans back to work. While there are downside risks related to worker shortages, an overheating economy, tax increases and overregulation, overall, households are healthier and consumers are demonstrating their ability and willingness to spend.”

Meanwhile, online purchases will jump 18% to 23% to between $1.09 trillion and $1.13 trillion, the NRF noted. Total retail sales in 2020 came in at $4.02 trillion, of which $920 billion was from online channels.

The organization also anticipates the country’s gross domestic product (GDP) will climb about 7% for the year, versus the 4.4% to 5% indicated in February, reaching pre-pandemic levels this quarter.

Consumers’ spending power has grown thanks to government fiscal policies, which have made up for the income Americans lost in March and April 2020, explained NRF chief economist Jack Kleinhenz. 

“Incoming data suggests that US economic activity continues to expand rapidly, and we have seen impressive growth,” he said, adding that he anticipated the fastest growth the country had seen since 1984.

Image: A mother and daughter shopping at the mall. (Shutterstock)