As of Thursday, February 11, 2016
Despite an uncertain economic beginning to the year, the National Retail Federation is forecasting that retail sales will be up 3.1 percent this year, which is slightly better than the 10-year average of 2.7 percent.
The forecast excludes automobiles, gas stations and restaurants. In addition, non-store sales are anticipated to jump between 6 percent and 9 percent in 2016.
“Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments—particularly in China—we think 2016 will be favorable for growth in the retail industry,” NRF President and Chief Executive Matthew Shay said. “All of the experts agree that the consumer is in the driver’s seat and steering our economic recovery. The best thing the government can do is stay out of the way, stop proposing rules and regulations that create hurdles toward greater capital investment, and focus on policies that help retailers provide increased income and job stability for their employees.”
The NRF’s chief economist, Jack Kleinhenz, said the economy had a bumpy ride last year, with fits and starts. “Despite the volatility, the economy continued to reduce unemployment, raise wages and actually increase real GDP [gross domestic product] by 2.4 percent,” Kleinhenz said. “Lower gas prices are creating more discretionary income to save, pay down debt and spend on travel, eating out and personal services. Retailers have benefited as well and continue to find ways to compete and succeed in a very cost-conscious environment.”
Additional economic insights from the National Retail Federation include:
• Economic growth should be more of the same and uneven. It is likely to be in the range of 1.9 to 2.4 percent in 2016.
• Employment gains of approximately 190,000 on an average monthly basis are expected. While that pace is down from 2015, it is consistent with the labor market growing near its underlying trend. By year-end, unemployment should drop to 4.6 percent.
• Prospects for consumer spending are straightforward—more jobs equal more income, which equals more spending. However, spending will come largely from the growth in jobs and not as much from increased wages.