US retail sales to rise at a slower pace in 2024, says NRF
FILE PHOTO: A shopper pulls a shopping basket at a Kohl’s department store in the Brooklyn borough of New York, U.S., January 25, 2022. REUTERS/Brendan McDermid/File Photo
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(Reuters) – U.S. retail sales are expected to rise as much as 3.5% this year, a slower pace than 2023, industry body National Retail Federation said on Wednesday, as sticky inflation dampens hopes of a strong recovery in consumer spending.
CONTEXT
U.S. consumer prices increased solidly in February on higher costs for gasoline and shelter, the second straight month of firmer inflation readings from the Labor Department.
Big retailers, including Walmart (NYSE:WMT) and Target, have laid out conservative forecasts for the year, as shoppers navigate an uncertain macroeconomic environment.
Mixed economic data has also pushed back expectations for the U.S. Federal Reserve’s first interest rate cut to June from May.
BY THE NUMBERS
The NRF has projected retail sales to rise between 2.5% and 3.5% this year to between $5.23 trillion and $5.28 trillion, compared with a 3.6% growth in 2023.
The trade body expects inflation to moderate to 2.2% on a year-over-year basis in December, due to a cooling labor market and retreating housing costs.
Retail sales, as defined by NRF, include both store-based and online purchases in a broad range of retail setting but excludes purchases at automotive dealers, gasoline stations and restaurants.
KEY QUOTES
“The resiliency of consumers continues to power the American economy, and we are confident there will be moderate but steady growth through the end of the year,” NRF President and CEO Matthew Shay said in a statement.
“I assumed mid-year reduction in the Fed funds rate, although I’m at the point where it could be moving out. That could negatively impact considerably on decision making by consumers,” NRF Chief Economist Jack Kleinhenz said.
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