Retail Sales & Consumer Spending Forecast

Economic Forecasts

Modest January Gain for Core Sales, E-commerce is Still a Puzzle

Kiplinger’s latest forecast on retail sales and consumer spending.


GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 150,000 per month in ’20 More »
Interest rates 10-year T-notes staying well below 2% until coronavirus fears ease More »
Inflation 2.1% by the end of ’20, from 2.3% at end '19 More »
Business spending Unchanged in '20- coronavirus makes global outlook uncertain More »
Energy Crude trading from $50 to $55 per barrel until coronavirus fears ebb More »
Housing Total starts up 3.2% in '20 More »
Retail sales Retail and food service sales, excluding autos and gas, should rise 3.5% in 2020 More »
Trade deficit Widening 6% in ’20 More »

The retail sales rise of 0.3% in January was driven almost entirely by restaurants and building materials stores. Mild weather in January for most of the country has helped home building and home improvement work to start the year earlier than usual, and has probably boosted restaurant traffic as well.

The rest of January retail sales didn’t look so good. In-store sales were completely flat. Clothing stores saw a big drop, but that may have been because December sales were so good. Department store sales scored a win by not declining.

E-commerce sales are still a puzzle. Reported e-commerce sales have downshifted since September, with almost no growth at all being recorded after nearly 20% growth through August 2019. This is hard to make sense of. The Census Bureau data series can be a bit funky sometimes, and it’s possible that it could be revised later. Perhaps a better report for the fourth quarter will be released by the Bureau on February 19.

Good consumer sentiment and a strong stock market (so far) in 2020 should provide support for consumer spending. Look for 2020 retail sales excluding motor vehicles and gasoline to rise 3.5%, a tad slower than last year’s 3.8% rate.

Source: Census Bureau, Retail and Food Service Sales statistics