By Alan Wolf, YSN
The world’s largest retail trade association is warning merchants to buckle their seatbelts and hold on tight ahead of the next round of national holidays.
According to the National Retail Federation’s (NRF’s) latest economic report, a booming economy coupled with the stockpiles of cash amassed by consumers means that even busier sales days lay ahead.
In the May issue of NRF’s Monthly Economic Review, Jack Kleinhenz, the trade group’s chief economist, predicted “remarkable growth ahead” based on current consumer spending, the increase in COVID vaccinations, and higher comfort levels with pre-pandemic behaviors like shopping, travel and family gatherings.
Specifically, NRF expects the U.S. economy to grow 6.6 percent this year, the highest level since 1984, when growth was pegged at 7.2 percent. For retailers, that translates into a sales hike of between 6.5 percent and 8.2 percent on top of last year’s 6.9 percent growth, for a chartbusting $4.4 trillion in revenue.
“The consumer is nearly always the key driver in the economy,” Kleinhenz said, “and with the consumer in good financial health, a sharp demand is expected to unfold over the coming months.”
Kleinhenz cited data from the Federal Reserve’s Beige Book and other sources showing that unemployment benefits, government stimulus checks and tax refunds have provided a substantial increase in personal income and purchasing power. Consumers are “sitting on a stockpile of cash” that could become “a spring-loaded spending mechanism,” he said.
“This feel-better situation will likely translate into higher levels of household spending,” he added, “especially around upcoming holidays like the Fourth of July.”