Retail sales for the year now expected to grow 3.4%
WASHINGTON – The National Retail Federation, citing strong sales in the first half of the year, said Tuesday that it now expects 2016 retail sales to grow 3.4% over last year. The NRF had previously predicted sales would grow 3.1%. The trade association also raised its forecast for online and other non-store sales, which are included in the overall figure, saying they are now expected to increase from 7% to 10%, rather than the 6% to 9% forecast earlier.
“Economic indicators are showing positive trends for retail,” NRF president and CEO Matthew Shay said in a statement. “Challenges remain, with some greater than others depending on the retail category, but consumer confidence remains high and we believe that retail customers will continue the positive trends we have seen in the first two quarters of the year.”
Retail sales in the first half of 2016 performed at a solid pace, growing close to 4% on a year-over-year basis, according to NRF calculations, which exclude automobiles, gasoline stations and restaurants. NRF expects gross domestic product to grow between 1.9% and 2.4%, and the association said an improved housing market, job growth, higher wages and other factors have boosted consumer spending.
“There are many factors that could prove to be hurdles but our overall outlook is optimistic,” NRF Chief Economist Jack Kleinhenz said. “Uncertainty surrounding the presidential election could make consumers more cautious, and the combination of a rising dollar and global slowdown have impacted exports, but other factors like favorable weather patterns that will help move winter merchandise support our outlook.”
NRF said it is watching economic developments closely and will adjust its forecast as needed, with the next update to forecast will come as part of NRF’s annual holiday forecast in October.