Consumers sentiment sits at a seven-year high and American’s are holding more cash from lower fuel prices which are expected to push retail sales up 4.1% this year, according to the National Retail Federation. This forecast is a little higher than 3.5% sales growth realized in 2014. Online sales are expected to increase between 7% and 10% this year, according to the trade group’s forecast released on Thursday (Feb. 12).
“Already facing far fewer obstacles than this time last year in terms of growth opportunities, retailers are optimistic about the potential that exists for healthy growth in retail sales and consumer engagement in 2015,” said NRF President and CEO Matthew Shay.
“While our outlook for the year ahead is positive, we aren’t quite out of the woods; in order to see continued momentum we need a commitment from our leaders in Washington to pass legislation that will encourage investment, create jobs and set us on the path towards sustained, long-term economic growth,” Shay added.
The NRF also shared its economic insights for the broader economy. U.S. Gross Domestic Product is expected to land between 2.7% and 3.2% over last year and the country is expected to add between 220,000 and 230,000 jobs in 2015.
“The economy appears to finally have gained some real traction and after a somewhat turbulent 2014, we expect to see continued gains in economic activity in the year ahead,” said NRF Chief Economist Jack Kleinhenz. “While Americans are benefiting from a pickup in wages and jobs and gains in the U.S. stock market, economic slack has been reduced.”
He said there is still a ways to go to achieve sustainable economic growth. Kleinhenz warns there are a few wild cards that retailers will need to keep an eye on, like global economic growth, energy prices and inflation.
Additionally, January retail sales released Thursday by the National Retail Federation, which excludes automobiles, gas stations and restaurants, increased 0.2% seasonally adjusted month-to-month and 3.7% unadjusted year-over-year. These results confirm holiday sales growth of 4%.
The U.S. Commerce Department said on Thursday that January retail sales decreased 0.8% over the previous month seasonally adjusted, and increased 3.3% unadjusted year-over-year.