Washington, D.C. — The National Retail Federation (NRF) predicts U.S. retail sales in 2021 will increase between 10.5 to 13.5 percent over last year to a range of $4.44 trillion and $4.56 trillion. These predictions are higher than the initial 2021 forecast the organization made in February that was between 6.5 percent and 8.2 percent growth and a total between $4.33 trillion and $4.4 trillion.
In the beginning of 2021, the economy was looking more positive for the retail industry, but there were still pandemic restrictions and limitations on businesses. However, states across the country have lifted these pandemic restrictions, allowing for business for retailers to flourish. Jack Kleinhenz, NRF’s chief economist, says the economy is growing at an accelerating rate due to months of pent-up demand from people being stuck inside their homes for a year. The NRF does not revise retail sales’ forecasts often, but the numbers had improved so much since February that they needed to, according to Kleinhenz.
The first five months of 2021 showed retail sales were 17.6 percent higher than the same time period the year before, which meant the numbers already surpassed the original forecast of retail sales. Additionally, retail sales in May 2021 totaled $388.6 billion, making it the second highest level on record. Since June 2020, retail sales have grown year-over-year each month.
The U.S. gross domestic product (GDP) grew in the first quarter of 2021 at an annualized rate of 6.4 percent, and the NRF’s revised prediction for the full year’s GDP is for it to grow close to 7 percent on an annualized basis. The NRF also expects personal consumption expenditures, which include both goods and services, to grow 7.5 percent year-over-year rather than just 4.5 percent predicted earlier this year in February
“Our initial forecast was made when there was still great uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus,” says Kleinhenz. “Since then, we have seen spending grow, vaccines have become available to virtually anyone who wants one, infections have fallen and additional stimulus in the form of the American Rescue Plan has been signed into law.”
— Julia Sanders