US retail sales are forecast to grow between 3.8% and 4.4% to reach more than US$3.8 trillion in 2019, despite threats from an ongoing trade war, the volatile stock market and the effects of the government shutdown, new figures suggest.

The projected increase from the National Retail Federation (NRF), which excludes automobiles, gas stations and restaurants, compares to preliminary estimates that show retail sales during 2018 grew 4.6% over 2017 to $3.68 trillion, exceeding NRF’s forecast of at least 4.5% growth. 

The 2018 results are based on Commerce Department data up through November, but also include NRF estimates for December because the agency was closed during the recent government shutdown and has not yet released December data. The results are subject to revision once December numbers become available, and government numbers are revised again each spring regardless of the shutdown.

Meanwhile, online and other non-store sales, which are included in the overall number, are expected to increase in the same 10%-12% range as last year.

Growth of between 3.8% and 4.4% would result in total 2019 retail sales of between $3.82 trillion and $3.84 trillion. Based on growth of 10%-12%, online sales would total between $751.1bn and $764.8bn, which are included in the total.

“We believe the underlying state of the economy is sound,” says NRF president and CEO Matthew Shay. “More people are working, they’re making more money, their taxes are lower and their confidence remains high. The biggest priority is to ensure that our economy continues to grow and to avoid self-inflicted wounds. It’s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity not politics.”

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NRF chief economist, Jack Kleinhenz, adds the group is not seeing any deterioration in the financial health of the consumer. “Consumers are in better shape than any time in the last few years. Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy. The bottom line is that the economy is in a good place despite the ups and downs of the stock market and other uncertainties. Growth remains solid.”

In addition, Kleinhenz notes inflation and interest rates are expected to remain low this year and that retail sales have been helped by recent reductions in gasoline prices.

“Retailers so far have been able to largely mitigate the impact of new tariffs on steel, aluminum, and goods from China imposed in the past year,” he adds. “But tariffs could drive up the cost of consumer products and affect business direction and profits this year, particularly if tariffs on $200bn in Chinese products rise from 10% to 25% as currently scheduled for 1 March.”