"This Year US Retail Sales Expected to Increase Up to 13.5%... Largest Since 1984"

US Fiscal Stimulus Boosts Consumer Sentiment Explosion
Revival of Consumption Suppressed by COVID-19

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The National Retail Federation (NRF) forecasts that U.S. retail sales will grow at the fastest rate since 1984 this year. It is analyzed that the effect of the U.S. federal government's fiscal stimulus and the pent-up consumer sentiment suppressed by COVID-19 will drive consumption.

According to CNBC on the 9th (local time), Jack Kleinhenz, NRF Chief Economist, estimated that U.S. retail sales this year will increase by 10.5 to 13.5% compared to last year, reaching $4.44 trillion to $4.56 trillion (approximately 4,944 trillion to 5,078 trillion KRW).

This figure combines in-store and online sales, excluding automobile, gas station, and restaurant revenues.

This is a significant increase from the previous forecast released by NRF in February. Initially, NRF projected retail sales to grow by 6.5 to 8.2% compared to the previous year.

Additionally, the annual U.S. Gross Domestic Product (GDP) growth rate for 2021 was revised upward from the previous forecast of 4.4 to 5% to 7% on the same day.

The basis for this optimistic outlook is the fiscal stimulus effect from the U.S. federal government and the revival of consumer sentiment suppressed by the COVID-19 pandemic. In particular, it is analyzed that government aid flowing to consumers is driving a faster-than-expected recovery.

Kleinhenz, NRF Chief Economist, interpreted, "There are clear signs that the economy is strong and recovery will be swift," adding, "American households are ready to return to normal life, work, and play."

Earlier, major U.S. retailers such as Walmart, Levi's, and Macy's raised their performance forecasts for this year through their first-quarter earnings announcements.

However, some predict that growth in the retail sector may be limited due to minimum wage increases caused by labor shortages.

NRF stated, "The retail industry may face difficulties such as inflation, logistics issues, and labor shortages."

CNBC also pointed out, "It is still uncertain how much consumers will open their wallets for air travel, hotel stays, dining services, and so on."

This content was produced with the assistance of AI translation services.