US retail sales expected to grow at slower rate in 2019
The predicted rise in retail sales, which is excluding automobile dealers, gasoline stations and restaurants, however, would be less than the 4.6 per cent growth in 2018, citing threats from an ongoing trade war, the volatile stock market and the effects of the government shutdown.
NRF said in August of last year it expected 2018 retail sales to be up at least 4.5 per cent.
The retail industry group says the 2018 figure is its preliminary estimate for retail sales last year, pending the release of December data from the Commerce Department that was stalled from being announced during the government shutdown.
Matthew Shay, NRF president and CEO, said the biggest priority is to ensure that 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,” Shay said.
Shay said despite fears in the industry that a trade war in China or an economic slowdown might impact consumer spending, they believe the underlying state of the economy is sound.
“More people are working, they’re making more money, their taxes are lower and their confidence remains high,” he said.
Preliminary estimates, according to the NRF, show that retail sales during 2018 grew 4.6 per cent over 2017 to US$3.68 trillion ($5.08 trillion), exceeding NRF’s forecast of at least 4.5 per cent growth.
The figures include online and other non-store sales, which were up 10.4 per cent to US$682.8 billion ($942.6 billion). That met NRF’s forecast of 10-12 per cent online growth, and online is expected to grow in the same 10-12 per cent range again this year. The numbers exclude automobile dealers, gasoline stations and restaurants.
Growth of between 3.8 per cent and 4.4 percent would result in total 2019 retail sales of between US$3.82 trillion and $US3.84 trillion ($5.27 trillion to $5.3 trillion). Based on growth of 10-12 per cent, online sales would total between US$751.1 billion and US$764.8 billion ($1.03 trillion and $1.05 trillion), which are included in the total.
The 2018 results are based on Commerce Department data up through November but include NRF estimates for December because the agency was closed during the recent government shutdown and has not yet released December figures.
The NRF said the results are subject to revision once December numbers become available, and government numbers are revised again each spring regardless of the shutdown.
“We are not seeing any deterioration in the financial health of the consumer,” said Jack Kleinhenz, NRF chief economist.
“Consumers are in better shape than any time in the last few years,” Kleinhenz said. “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.”
Kleinhenz said the bottom line is the economy is in a good place despite the ups and downs of the stock market and other uncertainties.
“Growth remains solid,” he said.
NRF said it expects the overall economy to gain an average of 170,000 jobs per month, down from 220,000 in 2018, and that unemployment – currently at 4 per cent – will drop to 3.5 per cent by the end of the year. Gross domestic product is likely to grow about 2.5 per cent over 2018.
Kleinhenz said inflation and interest rates are expected to remain low this year and that retail sales have been helped by recent reductions in gasoline prices.
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