Outlook for U.S. sales is robust

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Outlook for U.S. sales is robust

By Deena M. Amato-McCoy - 02/08/2018
Stronger consumer confidence could make 2018 a strong year for retailers.

That’s according to the National Retail Federation, which forecast that overall retail sales will rise between 3.8% and 4.4% in 2018 over last year. Online and other non-store sales, which are included in the overall total, are expected to increase between 10% and 12%. (The NRF numbers exclude automobiles, gas stations and restaurants.)

Retail sales grew 3.9% in 2017 over 2016 to $3.53 trillion, according to the U.S. Census bureau’s preliminary estimate for the year. The number, which is subject to revision, exceeded NRF’s forecast for growth of between 3.2% and 3.8%.

“A robust holiday season for retail sales is just one of many barometers that points to a consumer that is clearly feeling positive about their financial health,” said NRF president and CEO Matthew Shay.

“Despite headlines to the contrary, the retail industry is strong, growing and meeting consumer demand with the products they want at the prices they expect and the shopping experience they want to have, online or in store,” he added. “With consumer confidence high, unemployment low and wages growing, there is every reason to believe that retail sales will be robust throughout the year.”

As the overall economy gains strength, consumer confidence will continue to swell. For example, the economy is expected to gain an average of 163,000 jobs a month, down slightly from 2017, but consistent with labor market growth. Unemployment is expected to drop to 3.9% by the end of the year, and gross domestic product growth is likely to be in the range of 2.5% to 3%, according to NRF.

“The underpinnings of the economy are very good and consumer spending is at the center of our outlook,” said NRF chief economist Jack Kleinhenz.

“The push and pull of forces both external and internal to the U.S. economy will continue to provide challenges, but on balance we expect a good year,” he added. “And as the retail industry continues to transform, retailers will leverage the new tax plan to invest in their employees, stores and new formats that engage with the ever-evolving and demanding consumer.”

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