The National Retail Federation released its 2014 economic forecast yesterday, projecting retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 4.1 percent, up from the preliminary 3.7 percent growth seen in 2013. NRF also announced it expects online sales in 2014 to grow between 9 and 12 percent.
"Measured improvements in economic growth combined with positive expectations for continued consumer spending will put the retail industry in a relatively good place in 2014," said NRF President and CEO Matthew Shay. "Though headwinds in the form of the looming debt ceiling debates, increased health care costs, and regulatory concerns still pose risks for both consumers and retailers, we are cautiously optimistic and hopeful that the economic tides will change in 2014.
"As the industry tackles important issues in 2014, such as immigration and tax reform, we will continue to push our nation's leaders to support policies that promote growth and create jobs for hard-working Americans."
A number of factors contributed to NRF's 2014 economic forecast, including:
- Economic growth is expected to be above its long-term historical average. Early estimates for growth in the economy as measured by real GDP could fall between 2.6 and 3 percent, a noticeable improvement from the estimated 1.9 percent rate for 2013, and the fastest pace in the past three years.
- The labor market is expected to continue its modest recovery averaging approximately 185,000 jobs per month, helping decrease unemployment to near 6.5 percent or lower by the end of 2014.
- Inflation as measured by the CPI is predicted to inch higher to as much as 1.7 percent in 2014.
- The housing sector is expected to continue to improve in 2014, and stronger household and business confidence should spur more consumer spending overall.
"The economy remains susceptible to buffets as we are already witnessing in the New Year, thanks to harsh winter weather, domestic and global financial issues," said NRF Chief Economist Jack Kleinhenz. "While we are careful not to ignore the challenges, we are optimistic and hopeful that future disruptions will be limited, allowing employment and business investment to grow all the while giving retailers and their customers the confidence in the economy they need."
Read more about consumer behavior.