NRF`s Retail Sales Outlook Predicts Economic Recovery Toward End of 2001
Retail Group Says Recessionary Fears Unwarranted
WASHINGTON, April 12 -- The National Retail Federation (NRF)
says the U.S. economy is not in a recession and is anticipating an upswing in
consumer behavior toward the end of 2001, leading into a "U" shaped recovery
for the current economic slowdown.
Writing for NRF`s Retail Sales Outlook, NRF Chief Economist Rosalind Wells
said, "Although the economy was unquestionably weak in the first few months
of 2001, we see signs that the malaise will end and that economic activity
will improve in the second half of the year."
Wells pointed to several factors for her positive long-term outlook
including a stable housing market, the Federal Reserve`s multiple interest
rate cuts that will likely spark refinancing activity and put more money in
consumers` pockets, and a still-positive job market.
According to the Retail Sales Outlook, NRF`s quarterly economic forecast,
the contrast between the economy being in overdrive and screeching to almost a
standstill is what is causing the pain. Wells said the lack of a true decline
in economic activity and the positive employment and income picture supports
her assertion that the U.S. has avoided a true recession.
Wells observed that the economy likely would not experience a fast bounce
back, described by some economists as a "V" shaped recovery. Rather, the
economy will probably evince a "U" shaped recovery, with a few more quarters
of growth below the economy`s potential -- about 3.0 percent -- followed by
stronger results toward the end of the year.
Wells expects total consumer spending to grow 3.0 percent this year, less
than the 5.3 percent of the last two years but still solid. She also
predicted that GAF sales (general merchandise, furniture and home furnishings)
will grow 4.2 percent for 2001, compared to 6.8 percent in 2000.
In general, Wells does not expect a sharp re-acceleration in the economy,
rather a gradual improvement. However, she remains upbeat about the retail
industry`s prospects in the near term.
"Retailers will be faced with the challenges of less robust growth, but
opportunities to excel will exist for those who factor the environment into
their plans."
The National Retail Federation (NRF) is the world`s largest retail trade
association with membership that comprises all retail formats and channels of
distribution including department, specialty, discount, catalog, Internet and
independent stores. NRF members represent an industry that encompasses more
than 1.4 million U.S. retail establishments, employs more than 20 million
people -- about 1 in 5 American workers -- and registered 2000 sales of nearly
$3.2 trillion. NRF`s international members operate stores in more than 50
nations. In its role as the retail industry`s umbrella group, NRF also
represents 32 national and 50 state associations in the U.S. as well as 36
international associations representing retailers abroad.
For an electronic copy of the April 2001 Retail Sales Outlook newsletter
in PDF format, please contact Sarah Scheuer at 202-626-8189.
For more information about NRF, visit the Web site at http://www.nrf.com .
CONTACT:
Pamela Rucker, 202-783-7971
ruckerp@nrf.com
Sarah Scheuer, 202-783-7971
scheuers@nrf.com
both of the National Retail Federation
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