US. retail sales are expected to rise between 3.5% and 4.1% to more than $3.9 trillion in 2020 despite fears surrounding the coronavirus outbreak and an ongoing trade war, the National Retail Federation (NRF) said on Wednesday. The retail industry group cited steady wage growth, lower interest rates, and strong consumer confidence to support its forecast. It also assumes that the coronavirus outbreak will not become a global pandemic.
However, the NRF said it expects sales to take a hit if China factory shutdowns continue. The projections include both online and physical store sales.
Preliminary results show retail sales for 2019 grew 3.7% over 2018 to $3.79 trillion, falling short of the trade body’s forecast for growth of at least 3.8%, the NRF said.
"There are always wild cards we cannot control like coronavirus and a politically charged election year," NRF President and Chief Executive Matthew Shay said. "But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way."
NRF Chief Economist Jack Kleinhenz said on Wednesday that while “the economy is growing at a more modest pace,” consumers are spending money, fuelled by steady wage growth and a strong job market.
The retail body also said it expects the overall economy to gain between 150,000 and 170,000 jobs per month in 2020, down from 175,000 in 2019, and unemployment, which is currently at 3.6%, to drop to 3.5% by the end of the year.
The trade body also said online and other nonstore sales, which are included in the overall number for 2020, were expected to increase between 12% and 15%.
The retail sales numbers exclude automobiles, gasoline stations and restaurants, the NRF said.