The National Retail Federation released its 2016 economic forecast today, projecting retail industry sales (which exclude automobiles, gas stations and restaurants) will grow 3.1%, higher than the 10-year average of 2.7%. The NRF also announced today it expects non-store sales in 2016 to grow between 6% and 9%.
“Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments — particularly in China — we think 2016 will be favorable for growth in the retail industry,” said NRF President and CEO Matthew Shay. “All of the experts agree that the consumer is in the driver’s seat and steering our economic recovery. The best thing the government can do is stay out of the way, stop proposing rules and regulations that create hurdles toward greater capital investment and focus on policies that help retailers provide increased income and job stability for their employees.”
“The economy had a bumpy ride in 2015 with fits and starts along the way,” said NRF Chief Economist Jack Kleinhenz. “Despite the volatility, the economy continued to reduce unemployment, raise wages and actually increase real GDP by 2.4%. Lower gas prices are creating more discretionary income to save, pay down debt and spend on travel, eating out and personal services. Retailers have benefited as well, and continue to find ways to compete and succeed in a very cost-conscious environment.”
ADDITIONAL ECONOMIC INSIGHTS:
- Economic growth should be more of the same and uneven. It is likely to be in the range of 1.9% to 2.4% in 2016.
- Employment gains of approximately 190,000 on an average monthly basis are expected. While that pace is down from 2015, it is consistent with the labor market growing near its underlying trend. By year end, unemployment should drop to 4.6%.
- Prospects for consumer spending are straightforward — more jobs equals more income, which equals more spending. However, spending will come largely from the growth in jobs and not as much from increased wages.
Retail sales according to NRF include most traditional retail categories, including auto parts and accessories stores, non-store categories, discounters, department stores, grocery stores and specialty stores, and exclude sales at automotive dealers, gas stations and restaurants.