NRF: U.S. retail sales to exceed $4.44 trillion in 2021

The National Retail Federation ( NRF ) raised its forecast for U.S. retail sales in 2021 , predicting the U.S. economy will grow at its fastest pace since 1984 as consumer spending accelerates.

The NRF forecast on Wednesday that total U.S. retail sales in 2021 will be between $4.44 trillion and $4.56 trillion, up from $4.02 trillion in 2020. (The NRF data excludes auto dealers, gas stations and restaurants.)

The revised forecast exceeds the NRF’s initial forecast of at least 6.5% in February. The group noted that it made its original forecast amid significant uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus. (That forecast was made before the passage of the American Rescue Plan Act.)

Non-store and online sales are expected to grow 18% to 23% this year, from $1.09 trillion to $1.13 trillion, as e-commerce demand continues to grow . By comparison, non-store and online sales totaled $920 billion in 2020.

Additionally, the NRF now expects full-year GDP growth to be close to 7%, compared with forecasts of 4.4% and 5%, respectively, earlier this year. Output is expected to return to pre-pandemic levels this quarter.

"We are seeing clear signs of a strong and resilient economy," said NRF Chief Economist Jack Kleinhenz. "Incoming data suggest that U.S. economic activity continues to expand at a rapid pace, and we are already seeing impressive gains. Most indicators suggest that the U.S. economy will expand with vigor in the coming months and for the remainder of the year."

Kleinhenz said massive fiscal and monetary policy interventions boosted personal incomes, filling the income well lost in March and April last year and creating excess purchasing power.

Given the strength in consumer spending, Kleinhenz said he expects the U.S. to experience its fastest growth since 1984. He added that the economy is reopening much faster than most people believed, even a year ago.

The U.S. economy is in good shape. Although inflation has occurred due to factors such as fluctuations in tax policies, the overall economic situation and consumption levels have remained stable and rising.

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