Retail sales in 2020 are forecast to rise between 3.5% and 4.1%, topping $3.9 trillion, despite the headwinds of a lingering trade war, the coronavirus outbreak and an upcoming presidential election, the industry's trade group said Tuesday.
"The nation's record-long economic expansion is continuing, and consumers remain the drivers of that expansion," National Retail Federation President and CEO Matthew Shay said in a statement.
"With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead," he added. "There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way."
NRF said its 2020 forecast assumes the coronavirus does not become a global pandemic.
It said business confidence and 2020 retail sales could be hit "if factory shutdowns in China continue, particularly if delivery of holiday season merchandise is affected."
"I feel we are fortunate we are lagged here [in America]. [Coronavirus] occurred elsewhere sooner," NRF Chief Economist Jack Kleinhenz said during a briefing with members of the media. "We have had time to think about it."
In some ways, it is "fortunate" the outbreak is taking place when the U.S. economy is on strong footing, Kleinhenz added. "If this had happened back in 2007 ... it would have been probably worse."
For now, Kleinhenz called coronavirus a "wait and see situation."
In recent days, manufacturing facilities have been coming back online in China, offering "encouraging news" for retailers dependent on the region for their supply chains, Shay said.
Back in the U.S., where the number of coronavirus cases has been much less severe, "there is a lot of preparation going on out of an abundance of caution," the CEO said.
Meantime, preliminary results show retail sales grew 3.7% in 2019, to $3.79 trillion, falling short of its forecast for growth of at least 3.8%, NRF said. But it said its forecast for last year was based on "incomplete data" because of the government shutdown.
E-commerce sales, which are included in NRF's overall forecast, are expected to grow between 12% and 15%, to between $870.6 billion and $893.9 billion, in 2020.
The trade group expects the overall economy to gain between 150,000 and 170,000 jobs each month this year, compared with an average of 175,000 last year. It expects the unemployment rate in the U.S. to remain around 3.5%.