National Retail Federation Boosts 2018 Forecast
The National Retail Federation revised its 2018 economic forecast, saying retail sales are expected to increase by at least 4.5 percent this year compared with 2017 after an earlier forecast saying retail sales would increase 3.8 percent to 4.4 percent, said Jack Kleinhenz, the NRF’s chief economist.
“There are many factors that can impact our forecast, but our overall outlook is optimistic,” Kleinhenz said. “Spending was weaker than expected at the beginning of the first quarter, but it has grown more rapidly since then, and we continue to anticipate strong sales during the second half of 2018.”
U.S. retail sales have increased every month since November 2009, when the American economy started emerging from a recession. With the exception of a 90-day period at the beginning of 2010, every month’s retail sales have posted year-over-year increases. The NRF’s revised forecast examines retail sales, personal income and consumption. It excludes car sales, gas-station revenues and restaurants.
In July, retail sales were up 4.9 percent over the same period last year, according to the NRF. Online sales were strong with a 11.3 percent year-over-year gain while clothing and clothing accessories stores saw their sales grow by 5.4 percent compared to July 2017.
Retail sales have been helped by a low unemployment rate of 3.9 percent. Consumer confidence continues to be strong, said Lynn Franco, director of economic indicators for The Conference Board, which produces a Consumer Confidence Index.
“Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong. However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines [in consumer sentiment] suggest consumers do not foresee growth accelerating,” she said in a statement.
Kleinhenz agreed that there is some economic turbulence on the horizon, which includes threats of imposing tariffs on Chinese imports. “Despite this upgrade in our forecast, uncertainty surrounding the trade war and higher-than-expected inflation due in part to increased oil prices could make consumers cautious during the fall season,” he said.