The economy could experience the fastest growing since the 1980s, according to NRF
With more businesses reopening and employees returning to work, the U.S. economy is on solid footing and could experience its fastest growing in more than three decades, the chief economist of the National Retail Federation, Jack Kleinhenz.
“While there is a lot of uncertainty about how fast and how far this economy will grow in 2021, surveys show an increase in the number of people vaccinated, a greater willingness to be vaccinated, increased spending and comfort with the resumption of pre-pandemic behaviors such as shopping. , trips and family reunions, ”Kleinhenz said. “This well-being situation will likely translate into higher levels of household spending, particularly around the upcoming holidays like July 4 and spending associated with returning to work and back to school.”
“The consumer is almost always the primary driver of the economy, and with good consumer financial health, strong demand is expected to emerge in the coming months,” Kleinhenz said.
The report states that the latest edition of the Federal Reserve Beige book “Affirms what the economic data is signaling: US growth is starting to accelerate.” The Fed’s assessment and other data show that unemployment benefits, government stimulus checks and tax refunds have resulted in substantial increases in personal income and purchasing power. Consumers are “sitting on a stock of cash” that could become “a spring loaded spending mechanism,” Kleinhenz said.
Among other favorable indicators, the $ 2.4 trillion saved by households in the month of February alone was roughly double the average monthly savings during the pre-pandemic 2019 period and is in addition to the savings accumulated over the last month. years, consumers stay at home rather than eating out, traveling or playing sports. and entertainment events.
In addition, the use of consumer credit is on the rise, with outstanding credit surging in February to reach its highest level since the end of 2017. The increase in borrowing “highlights an increasingly confident consumer as the economy accelerates, job growth picks up, and more states rise up. heavy restrictions, ”Kleinhenz said.
Kleinhenz warned that “outsized swings” in economic data in 2020 caused by the pandemic, hurricanes, wildfires and other events will make year-to-year comparisons difficult in 2021. Federal agencies have “Doing their best with the information available” to make seasonal adjustments explain the swings, he says.
NRF’s calculation of retail sales – which excludes car dealerships, gas stations, and restaurants to focus on core retailing – is based on data from the Census Bureau, which released its annual sales revision. retail dating back to 2013 last week. NRF has revised its figures accordingly and now shows retail sales of $ 4.02 trillion in 2020 instead of the $ 4.06 trillion originally reported. But 2020 was up 6.9% from 2019 rather than 6.7%, as 2019 was revised down to $ 3.76 trillion from $ 3.81 trillion.
The annual update is done to replace previously reported data with more precise data and to compare figures from the Census Bureau’s Annual Retail Trade Survey. Retail businesses are required by law to complete the annual survey, while the monthly survey is voluntary and sometimes reflects incomplete or unaudited estimates and records rather than final figures.
Even with the revisions, 2020 sales broke the previous record of 6.3% set in 2004 despite the pandemic. NRF has provide that retail sales in 2021 – excluding autos, gasoline and restaurants – will increase between 6.5% and 8.2% in 2020 to between $ 4.33 trillion and $ 4.4 trillions of dollars.
The National Retail Federation, the world’s largest retail association, is a passionate advocate for the people, brands, policies and ideas that help the retail business thrive. From its headquarters in Washington, DC, NRF strengthens the industry that powers the economy. Retail is the nation’s largest private sector employer, contributing $ 3.9 trillion to annual GDP and supporting one in four jobs in the United States – 52 million American workers. For over a century, NRF has been the voice of every retailer and every retail job, educating, inspiring and communicating the powerful impact of retailing on local communities and global economies.