The National Retail Federation (NRF) has revised its 2021 forecast upwards, saying the U.S. economyis growing faster than expected.
NRF now projects that retail sales will expand between 10.5 and 13.5 percent to reach between USD 4.44 trillion and USD 4.56 trillion (EUR 3.65 trillion and EUR 3.74 trillion).
The association originally projected at least 6.5 percent growth in February, when there was greater uncertainty about consumer spending, vaccine distribution, and other factors, NRF said in a press release.
“Unprecedented” consumer spending will result in the fastest growth in sales the country has experienced since 1984, NRF Chief Economic Jack Kleinhenz said during the organization’s State of Retail and Consumer webinar on 9 June.
“The U.S. economy continues to expand rapidly. It has accelerated much faster than many of us had believed possible even a year ago,” Kleinhenz said. Most indicators point toward an “energetic expansion” over the upcoming months and through the remainder of the year, he added.
The sheer amount of both fiscal and monetary policy intervention has lifted personal income and aided a recovery from progress lost in March and April of last year, creating an overabundance of purchasing power, according to Kleinhenz.
“The combination of vaccine distribution, fiscal stimulus, and private-sector ingenuity have put millions of Americans back to work,” NRF President and CEO Matthew Shay said in the press release.
Boise, Idaho, U.S.A.-based Albertsons is seeing more shoppers interested in buying quality foods and beverages, purchasing more fresh foods, better cuts of meat, and better wines, President and CEO Vivek Sankaran said during the webinar. The retail conglomerate is also seeing more omnichannel shopping behavior, according to Sankaran.
“Consumers enjoy the convenience of shopping online, but also enjoy getting back to the store,” he said.
While there are downside risks related to worker shortages, a potentially overheating economy, calls from the White House for tax increases to pay for domestic programs including an infrastructure bill, U.S. households are economically healthier than they have been since the COVID-19 pandemic hit. And that is translating into consumers’ ability and willingness to spend, according to Shay.
NRF now projects that non-store and online sales, which are included in the total retail sales figure, are expected to grow between 18 percent and 23 percent to a range of USD 1.09 trillion to USD 1.13 trillion (EUR 903 billion to EUR 928 billion) as consumers continue to more fully embrace e-commerce.
In addition, NRF now projects full-year gross domestic product growth to approach 7 percent, up from the range of 4.4 percent and 5 percent forecasted earlier this year.
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