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The National Retail Federation is projecting that U.S. retail sales will increase 3.1 percent this year, higher than the 10-year average of 2.7 percent (excluding automobiles, gas stations and restaurants).

April 6, 2018

2 Min Read

Job creation and economic growth are driving factors behind the increase in retail sales.

NRFLogoRetailSales.jpgThe National Retail Federation is projecting that U.S. retail sales will increase 3.1 percent this year, higher than the 10-year average of 2.7 percent (excluding automobiles, gas stations and restaurants).

The 3.1 percent increase, however, is actually down 1 percent from last year.

The NRF also says it expects non-store sales in 2016 to grow between 6 and 9 percent.

“The economy had a bumpy ride in 2015 with fits and starts along the way,” says Jack Kleinhenz, chief economist, NRF. “Despite the volatility, the economy continued to reduce unemployment, raise wages and actually increase real GDP by 2.4 percent. 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 predictions from the NRF include:

  • Economic growth should be more of the same and uneven. It will likely be in the range of 1.9 to 2.4 percent this year.

  • Employment gains of nearly 190,000 on an average monthly basis are expected. Despite being down from 2015, the NRF predicts by the end of the year, unemployment should drop to 4.6 percent due to the consistent labor market growth.

  • The prospects for consumer spending are straightforward. More jobs mean more income, which means more spending. However, spending will likely come from job growth and not from increased wages.

“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,” says Matthew Shay, president and chief executive officer, NRF. “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.”

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