The National Retail Federation raised its guidance for annual retail sales today – by a lot.
The trade group now expects retail sales to grow 10.5% to 13.5% for the year. That compares to the 6.5% increase it predicted in February.
The NRF also expects GDP to grow 7% for the year, up from the 4.4% to 5% growth previously forecast. That would be the fastest growth since 1984.
“We are seeing clear signs of a strong and resilient economy,” NRF Chief Economist Jack Kleinhenz said in a statement. “Incoming data suggests that U.S. economic activity continues to expand rapidly, and we have seen impressive growth. Most indicators point toward an energetic expansion over the upcoming months and through the remainder of the year.”
Kleinhenz said that the sheer amount of both fiscal and monetary policy intervention has lifted personal income and filled the well of income that was lost back in March and April of last year, creating an overabundance of purchasing power.
In addition, the reopening of the economy has accelerated much faster than most had believed possible, even a year ago.
“The economy and consumer spending have proven to be much more resilient than initially forecasted,” NRF President and CEO Matthew Shay said. “The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity have put millions of Americans back to work. While there are downside risks related to worker shortages, an overheating economy, tax increases and over-regulation, overall households are healthier, and consumers are demonstrating their ability and willingness to spend.”
