U.S. retail sales are expected to rise as much as 8.2% to more than $4.33 trillion this year as the economy begins to fully reopen and more people get the coronavirus vaccine, the National Retail Federation (NRF) said Wednesday.
The trade group's preliminary reading for retail sales in 2020 show sales grew 6.7% to $4.06 trillion, above the NRF's forecast for at least 3.5% growth. The unexpected boost in sales growth was largely due to a nearly 22% growth to $969.4 billion in online sales, which became a popular shopping option for consumers throughout the pandemic.
For 2021, the NRF expects sales to rise between 6.5% and 8.2%, with online sales expected to increase between 18% and 23% to as much as $1.19 trillion as consumer trends continue to rely on online shopping.
"Despite the continuing health and economic challenges COVID-19 presents, we are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending," NRF President and CEO Matthew Shay said in a statement.
The trade group also expects that overall economy to gain between 220,000 and 300,000 jobs per month, depending on the pace of the overall economy in the second and third quarters. The NRF forecasts real GDP growth to be between 4.5% and 5.0%, taking into account the economy's stagnant growth at the end of last year.
"The trajectory of the economy is predicated on the effectiveness of the vaccine and its distribution," NRF Chief Economist Jack Kleinhenz said in a statement. "Our principal assumption is that that the vaccination will be effective and permits accelerated growth during the mid-year. The economy is expected to see its fastest growth in over two decades."
Kleinhenz highlighted that 2021 will closely follow consumer trends seen throughout 2020, making it the second year of savings, record high stock valuations, rising housing prices, additional government aid and low interest rates.
The Biden administration has been working to expand the nation's weekly distribution of coronavirus vaccines since President Joe Biden took office in late January. Earlier this week, the White House announced that it will now supply states with 14.5 million doses of either the Pfizer
Moveover, a third vaccine developed by Johnson & Johnson