Retail sales in the U.S. this year are expected to total more than $4.33 trillion as more individuals receive the COVID vaccine and the economy reopens.
That’s according to the National Retail Federation’s just-released annual forecast, which estimates that 2021 retail sales will grow between 6.5% to 8.2% over last, totaling between $4.33 trillion and $4.4 trillion. Online sales, which are included in the total, are expected to grow between 18% and 23%, to between $1.14 trillion and $1.19 trillion.
Early results from NRF show that retail sales grew 6.7% in 2020 to $4.06 trillion, nearly doubling NRF’s forecast of at least 3.5% growth, which did not account for the impact of a global pandemic. This figure compares with 3.9% growth in 2019. Online and other non-store sales, which are included in the total 2020 figure, skyrocketed to 21.9% at $969.4 billion. (The NRF numbers exclude automobile dealers, gasoline stations and restaurants.)
NRF expects the overall economy to gain between 220,000 and 300,000 jobs per month in 2021, depending on the pace of the overall economy in the second and third quarters. Despite the economy’s stalled momentum at the end of last year, NRF forecasts real GDP growth between 4.5% and 5.0%.
“The trajectory of the economy is predicated on the effectiveness of the vaccine and its distribution,” said NRF chief economist Jack Kleinhenz said. “Our principal assumption is that that the vaccination will be effective and permits accelerated growth during the mid-year. The economy is expected to see its fastest growth in over two decades.”
Kleinhenz noted that this year marks the second year of savings, record-high stock valuations, increased home prices, enhanced government support, and record low-interest rates, which are all contributing factors towards the economy and consumer spending behavior.
The NRF noted that 2020 November-December holiday season accounted for nearly one-fifth (19.4%) of overall annual retail sales. Retail sales during the period grew an unexpectedly high 8% to $787.1 billion. Non-store and other online sales represented $206.9 billion of total holiday sales, up 22.6% over the year before.