By Alan Wolf, YSN
Despite the uncertainties of coronavirus, a presidential election and a lingering trade war, total retail sales in 2020 are expected to increase between 3.5 percent and 4.1 percent, to more than $3.9 trillion, the National Retail Federation (NRF) forecasted.
That compares to the 3.7 percent growth in 2019, to $3.8 trillion, the retail trade association said.
Chief among the beneficiaries will be furniture dealers and other sellers of home-related products, as low interest and unemployment rates spur home buying and mortgage refinancing, which should add to consumer spending on those categories, the group noted.
Ironically, consumer electronics dealers may also get a boost from the coronavirus outbreak, some analysts have argued, as people eschew public entertainment outlets and invest in large-screen TVs and home theaters instead.
The NRF’s 2020 projection includes expected online sales gains of between 12 percent and 15 percent, representing upwards of $893.9 billion in revenue.
“The nation’s record-long economic expansion is continuing, and consumers remain the drivers of that expansion,” said NRF President/CEO Matthew Shay. “With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead. There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound, and consumers continue to lead the way.”
Indeed, the NRF expects the overall economy to gain between 150,000 and 170,000 jobs per month this year, compared with an average 175,000 in 2019, and that unemployment —currently at 3.6 percent — should stay around 3.5 percent. Gross domestic product is likely to grow 1.9 percent, down from preliminary estimates of 2.3 percent in 2019.
“The economy is growing at a more modest pace, but the underlying economic fundamentals remain in place and are positive,” observed NRF Chief Economist Jack Kleinhenz. “Consumers remain upbeat and have the confidence to spend, and the steady wage growth that has come with the strong job market is fueling their spending. The state of the consumer is very healthy.”
The forecast assumes that coronavirus does not become a global pandemic, and the trade group cautioned that business confidence and retail sales could be impacted if factory shutdowns in China continue, particularly if delivery of holiday season merchandise is affected.
Similarly, the wide range of potential policy outcomes associated with November’s elections could cause both consumers and businesses to be cautious, the NRF added.