Economy Watch: NRF Predicts Retail Sales Growth Around 4% This Year

Jobs and income gains as well as a relatively low debt environment will drive sales growth this year.
Source: National Retail Federation
Source: National Retail Federation

The National Retail Federation released its economic forecast for 2017 on Wednesday, projecting that U.S. retail industry sales—excluding cars, gasoline stations and restaurants—will grow between 3.7 percent and 4.2 percent this year compared with 2016. Online and other non-store/online sales, which are included in the overall number, are expected to increase between 8 percent and 12 percent.

NRF President & CEO Matthew Shay noted that with jobs and income growing and debt being relatively low, the fundamentals are in place for sales growth. But this year is also unlike any other. Consumers might remain hesitant to spend until they have more certainty about policy changes on taxes, trade and other issues being debated in Congress.

“Lawmakers should take note and stand firm against any policies, rules or regulations that would increase the cost of everyday goods for American consumers,” Shay said. He didn’t specifically raise the prospect of tariffs or a trade war, but those things would indeed drive retail prices up for some goods.

The NRF forecast is a baseline, and does not take into account any new measures being considered in Washington. Nevertheless, factors supporting consumer spending this year will be continuing job gains of about 160,000 per month, a low headline unemployment rate and U.S. economic growth between 1.9 percent to 2.4 percent this year.