Initial estimates show that retail sales in 2018 increased 4.6 percent from 2017 to reach $3.68 trillion, exceeding the NRF’s prediction of at least 4.5 percent growth. The number includes both online and other non-store sales, which grew 10.4 percent to $682.8 billion. The numbers align with the NRF’s forecast of 10 to 12 percent online growth. Online sales are expected to grow in the same 10 to 12 percent range in 2019. An increase of 3.8 percent to 4.4 percent would result in total 2019 retail sales between $3.82 trillion and $3.84 trillion. A 10-to-12 percent increase in online sales would add up to sales between $751.1 billion to $764.8 billion, which are included in the total. “We are not seeing any deterioration in the financial health of the consumer,” says Jack Kleinhenz, chief economist, NRF. “Consumers are in better shape than any time in the last few years. Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy. The bottom line is that the economy is in a good place despite the ups and downs of the stock market and other uncertainties. Growth remains solid.”
The impact of the recent government shutdown has not been adequately measured. Government workers will be paid retroactively, but some spending and expenses, such as eating out or entertaining, have been hurt. Government contractors will not receive back pay, says Kleinhenz. The speed at which the Internal Revenue Service handles the backlog of tax returns will affect Q1 spending. The 2018 results are based on Commerce Department findings collected through November 2018 and include NRF estimates for December because the agency was closed during the recent government shutdown. Actual December figures will be released soon, which will affect final 2018 results.
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