MNI BRIEF: NRF Revises US 2021 Retail Sales Forecast Higher

Retail sales this year should grow between 10.5% and 13.5% to more than USD4.44 trillion, National Retail Federation Chief Economist Jack Kleinhenz said Wednesday.

That's up significantly from the 6.5% to 8.2% range forecast in March as fiscal and monetary policy intervention has created an "overabundance" of purchasing power, he said at the NRF's inaugural State of Retail and the Consumer conference.

"It's prudent to update our forecast for retail sales in 2021 given the brightening picture," he said, noting that economic activity has been "more frontloaded than expected" and real GDP growth should approach 7% this year, up from the 4% to 5% range forecast in February. The NRF expects real PCE growth of roughly 7.5% compared to 4.5% at the end of January and inflation across 2021 at 2.4%, he said.

But Kleinhenz added that downside risks are "evident," and a jump in commodity prices, ongoing supply chain disruptions for imports, a shortage of available workers, and inflation pressures could still curb some spending this year.