Retail sales for the year could now exceed expectations thanks to tax reform and upbeat economic indicators, according to a report from the National Retail Federation (NRF).
The report outlined that sales, excluding gasoline stations, automobiles and resaturants, could reach up to 4.5% for 2018, in comparison to the prior forecast of 3.8% to 4.4%.
For the first half of 2018, retail sales were up 4.8% like for like on the previous year and in the most recent three month moving average, sales have climbed by 4.4%.
The NRF now expects gross domestic product for the year to grow at the higher end of the 2.5% to 3% range it forecasted earlier.
President and CEO of NRF, Matthew Shay, said: “Higher wages, gains in disposable income, a strong job market and record-high household net worth have all set the stage for very robust growth in the nation’s consumer-driven economy. We knew this would be a good year, but it’s turning out to be even better than expected.”
However chief economist at the NRF, Jack Kleinhenz is keen to be realistic about the news.
He said: “Despite this upgrade in our forecast, uncertainty surrounding the trade war and higher-than-expected inflation due in part to increased oil prices could make consumers cautious during the fall season.”
Department store Macy’s is expected to release its earnings later this week, which could give a further indication into what the luxury sector looks like as the market enters the second half of the year.