The forecast, released Tuesday, is nearly in line with the 4.6 percent gain the group preliminarily estimated for 2018 pending the release of December data from the Commerce Department that was delayed because of the government shutdown. The figures exclude sales from automobile dealers, gas stations and restaurants.
Still, the trade group acknowledges that an ongoing trade war with China and a volatile stock market could threaten this year's growth. The current forecast doesn't take into consideration the specter of tariffs on $200 billion in Chinese products rising to 25 percent from 10 percent as scheduled for March 1. The group says the impact of the government shutdown has been difficult to measure, but that it had little effect on spending last month.
"We can't get too hung up on noise ... The truth is that the consumer continues to be in a very good place," said Matt Shay, the trade group's president and CEO in a press briefing. Shay added that the biggest priority is to ensure the economy continues to grow and to avoid "self-inflicted wounds."
"It's time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity, not politics," Shay added. While stores like Sears Holdings Corp. face an uncertain fate, plenty of others are seeing robust sales helped by their own reinvention efforts — like speeding up deliveries and adding robots to relieve workers of menial tasks — as well as a solid economic backdrop. .
NRF expects overall economy to gain an average of 170,000 jobs per month, down from 220,000 in 2018 and that unemployment — currently at 4 percent — will drop to 3.5 percent by year-end. It said that gross domestic product is likely to increase about 2.5 percent over 2018. Economic growth reached 3.8 percent last spring and summer, the fastest six-month pace in four years.
Jack Kleinhenz, chief economist at the trade group, expects retailers will continue to increase wages but that won't necessarily translate into inflation.