Author: katiecmorgan

U.S. retailer group sees 2018 holiday sales up more than 4 percent

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NEW YORK (Reuters) – U.S. holiday sales in 2018 will increase 4.3 percent to 4.8 percent boosted by a strong economy but will be slower than a year ago when consumer spending surged to a 12-year high, according to a forecast from a leading retail industry group.

The National Retail Federation (NRF) said holiday sales growth will be higher than an average increase of 3.9 percent over the past five years but slower than the 5.3 percent growth witnessed a year earlier when consumer spending grew the most since 2005 and was boosted by tax cuts.

“Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF Chief Economist Jack Kleinhenz said.

“With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy,” he said.

The combination of more jobs, improved wages, tamed inflation and an increase in net worth all provide the impetus to spend, he added.

The retail trade group said it expects sales for the last two months of the year between $717.45 billion and $720.89 billion, excluding autos, gasoline and dining out. Holiday sales in 2017 were $687.87 billion.

NRF’s forecast is one of the most closely watched benchmarks ahead of the holiday season, when retailers like Amazon.com Inc, Walmart Stores Inc and Target Corp generate an outsized portion of their profits and sales.

The last two months of the year can account for 20 percent to 40 percent of annual sales for many retailers.

The NRF forecast follows other estimates from companies like AlixPartners, which says sales will grow in between 3.1 percent and 4.1 percent as “2017 will be a tough year to follow.” Forecasts from companies like Deloitte and PwC expect holiday retail sales to grow around 5 percent.

NRF also said Wednesday that it expects seasonal employment by retailers to reach between 585,000 and 650,000 jobs, up from 582,500 in 2017.

Shoppers expected to give retailers a holly, jolly holiday season as they buy a bit more

Posted on by katiecmorgan

, USA TODAY Oct. 3, 2018

Shoppers, buoyed by low unemployment and a slight uptick in wages, should make this a jolly holiday season for retailers, an industry trade group predicted Wednesday.

The National Retail Federation, an industry trade group, forecasts that sales in the last two months of this year should rise between 4.3 to 4.8 percent as compared to the holiday period in 2017.

Not counting purchases of cars, gas, or meals at restaurants, shoppers are expected to spend between roughly $717 billion and $720.89 billion in sales this year. The sales increase also tops the 3.9 percent average annual uptick the industry has seen in the last five years.

The forecast underscores the message from many retailers that the brisker sales they’ve reported in recent quarters are not a fluke. Shoppers spent $687.87 billion on purchases during last year’s holiday season, a 5.3 percent bounce over the previous year, and the biggest bump since 2010.

“Our forecast reflects the overall strength of the industry,” Matthew Shay, NRF’s president and CEO said in a statement. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

Giving gifts is great, especially if you can borrow the present later for yourself. Buzz60′ Tony Spitz has the details. Buzz60

National unemployment stands at 3.9 percent, close to an 18-year low. “The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend,” said Jack Kleinhenz, NRF’s chief economist.

NRF expects that overall retail sales for this year to be at least 4.5 percent higher than 2017.

CNBC FED SURVEY: FED EXPECTED TO HIKE RATES TWICE MORE THIS YEAR AND THEN RISK A ‘POLICY MISTAKE

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CNBC

Fed expected to hike rates twice more this year and then risk a ‘policy mistake’: CNBC survey

  • Nearly all respondents to the CNBC Fed Survey see the Fed hiking rates a quarter point this week to a new range of 2 to 2¼ percent.
  • In addition, 96 percent believe another quarter-point hike is coming in December.
  • About 60 percent see the Fed eventually raising rates above neutral to slow the economy.

Steve Liesman | @steveliesman

Look out for two more rate hikes this year from the Federal Reserve to go along with economic growth nearing 3 percent and a central bank that eventually raises rates explicitly to slow growth, according to respondents to the latest CNBC Fed Survey.

A full 98 percent of the 46 respondents, who include economists, fund managers and strategists, see the Fed hiking rates a quarter point this week to a new range of 2 to 2¼ percent. And 96 percent believe another quarter-point hike is coming in December.

“Fed funds increases in September and December are as certain as certain can be,” John Donaldson, director of fixed income at Haverford Trust, wrote in his response to the survey. “Their real challenge starts after the first increase in 2019, which will bring the rate to 2.75 percent, or finally back to even to inflation.”

Respondents see the funds rate rising by two more quarter points (50 basis points) in 2019, which would bring it to a range of 2.75 to 3 percent. After that, divisions set in, with about half the group seeing a third hike in 2019.

About 60 percent of the group see the Fed raising rates above neutral to slow the economy. The average that respondents see the funds rate eventually ending this hiking cycle is 3.3 percent.

“This means that the U.S. bond market will reach a decision point sometime in the next year, when market participants will have to decide whether the Fed will go beyond current market pricing,” said Tony Crescenzi, executive vice president at Pimco. “If and when it does, U.S. Treasuries will move higher.”

A fifth of the group say a “fed policy mistake” is one of the biggest threats facing the expansion, second only to trade protectionism.

“We are in jeopardy of watching trade and monetary policy plunge into a head-on collision, with no one wearing seat-belts, and the airbags have been disabled,” wrote Art Hogan, chief market strategist at B. Riley FBR. “The biggest risk in the market is a policy mistake, and we are working on a two-for-one special.”

Respondents support President Donald Trump‘s handling of the economy by a 61 percent to 30 percent margin, unchanged from the July survey. But 59 percent say his trade policies will reduce growth, and 52 percent say they will lower employment in the U.S.

A slight 53 percent majority also say the president’s negotiating tactics will lead to better trade agreements for the U.S., while 20 percent say they will be worse and 22 percent expect them not to change much.

Overall, the tariff effects on the economy are seen as modest. Among those who see negative effects, the average is just a 0.2 percent decline for GDP in 2019 and a 0.2 percent higher inflation.

But some see more substantial effects.

“The president should be remembered for his cuts in regulations that served the economy so poorly for years but instead will be remembered for his illogical, un-economically justifiable support for trade protection and tariffs. How sad is that?” wrote Dennis Gartman, editor and publisher of The Gartman Letter.

Strong economic growth ahead

But forecasts suggest the president has some room for his trade policies to subtract from growth without doing enormous economic damage. Respondents look for GDP year over year to be up 2.8 percent in 2018, versus 2.2 percent in 2017, and up 3 percent in 2019, defying the general belief in a slowdown next year predicted by many economists.

Inflation is seen ticking up to around 2.5 percent this year and next, while the unemployment rate is forecast to fall to 3.7 percent by 2019.

“Rarely are so many economic gauges of the U.S. economy so strong — including employment, income, retail sales, business spending, manufacturing and small business,” wrote Jack Kleinhenz, chief economist for the National Retail Federation. “The near-term outlook appears to be steady as she goes.”

Respondents see a low 14 percent probability of a recession in the next 12 months.

Stocks are seen growing, but slowly. The average forecast predicts the S&P 500 will rise to 2,956 this year and end 2019 at 3,038. While it would break the 3,000 level, it would represent just a 4 percent gain over the next 15 months.

Treasury yields are seen ending this year at 3.15 percent and 3.45 percent in 2019, suggesting much of the Fed tightening is priced into the bond.

Federal Reserve approves its third rate hike of the year

Posted on by katiecmorgan
WASHINGTON D.C. – The Federal Reserve approved its third rate increase this year, hiking the short-term interest rate on Wednesday to a range of 2 to 2.25 percent.

The move indicates that the nation’s central bank may soon be able to take a back seat for the first time since the 2008 financial crisis and allow the economy to steer itself.

Wednesday’s widely expected rate hike of one-quarter of a percentage point comes after the Federal Open Market Committee’s scheduled two-day policy meeting, and is a response to a robust economic landscape that includes low unemployment, an uptick in wage growth, and sweeping corporate tax reform.

“The near-term outlook appears to be steady as she goes,” said Jack Kleinhenz of the National Retail Federation. “Rarely are so many economic gauges of the U.S. economy so strong.”

The new rate also signals that the White House’s tit-for-tat global trade actions have so far had a muted impact on the nation’s nine-year economic growth streak.

The Fed kept rates artificially low for seven years after the Great Recession, zeroing out the rate in December 2008 and only raising it again in December 2015, under Janet Yellen’s chairmanship. Since then, Yellen raised the benchmark rate by one-quarter of a percentage point just four more times. After taking over from Yellen in February this year, Trump-appointed Federal Reserve Chairman Jerome “Jay” Powell has raised rates three consecutive times.

Chairman Powell has made note of the Fed’s precarious position as the economy heats up, saying last month that the Fed currently faces two main risks — either “moving too fast and needlessly shortening the expansion” or “moving too slowly and risking a destabilizing overheating.”

But Trump slammed Chairman Powell earlier this year, saying he was “not happy” about this year’s series of rate hikes.

“I don’t necessarily agree with it,” Trump told CNBC in July. “I’m not thrilled, because every time we go up, they want to raise rates again. But at the same time, I’m letting them do what they feel is best.”

Wednesday’s FOMC meeting was the first for economics professor Richard Clarida, who was confirmed earlier this month for a four-year term as Federal Reserve vice chairman. The board of governors has three remaining vacancies.

NBCNEWS

KTAL

The price of rising employment: Slow wage growth, trade risks

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If wage growth doesn’t kick into high gear, increasing inflation could swallow even the minimal improvement in purchasing power workers have attained.

A slowing rate of job growth in July nonetheless managed to pull some workers off the sidelines, but wage growth mired at 2.7 percent began to elicit concerns that wages will fail to keep up with inflation as the economy picks up steam.

At 157,000, the number of jobs created last month fell short of expectations, but upward revisions of the previous two months and a broad base of new jobs across industries left economists relatively sanguine about the miss.

“I don’t think you want things to be ‘great’ because great means the Fed worries about inflation and the economy moving ahead too quickly,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. “The expansion killer is the Fed making a mistake, moving too fast. We don’t want to see great right now. We just want to see good.”
Upward revisions to May and June added a combined total of 59,000 jobs added, bringing the monthly average to 224,000 over the past three months.  “In the past, summer months tend to show large employment fluctuations due to the timing of seasonal hiring,” National Retail Federation chief economist Jack Kleinhenz said in a statement. The retail sector eked out a small gain of 7,000 despite a loss of 32,000 jobs, largely due to the closure of the Toys R Us chain.

 

The labor market sectors with the most notable growth in July were professional and business services, which added 51,000 jobs; and manufacturing and healthcare/social assistance, which added 37,000 and 34,000 jobs, respectively.

“U.S. manufacturing is flexing some muscle right now,” said Mark Hamrick, senior economic analyst at Bankrate.com, but noted these and other labor market gains could be threatened by President Donald Trump’s protectionist sentiments. “Obviously, there are huge risks associated with the trade dispute,” he said.

If wage growth doesn’t kick into high gear, increasing inflation could swallow even the minimal improvement in purchasing power workers have attained in the recovery so far.

“I don’t think we’ve seen the brunt of the tariffs yet,” said Arne Kalleberg, professor of sociology at the University of North Carolina at Chapel Hill. Manufacturing and agriculture-related jobs would be especially at risk if China or the European Union enact retaliatory sanctions, he said.

Derailing the current labor market expansion could hurt the most at-risk members of the workforce the most and slow mediocre wage growth even further, even as rising inflation erodes the value of Americans’ pay.

“We have to think about the fact that inflation’s running at a 2 percent rate,” Hamrick said. “We’re on this rising interest rate trajectory.” If wage growth doesn’t kick into high gear, increasing inflation could swallow even the minimal improvement in purchasing power workers have attained in the recovery so far.

Economists say demographics are one factor behind wage growth that trails what most experts consider the low end of healthy wage growth by nearly a full percentage point. As baby boomers leave the workforce, the younger and generally less-experienced workers taking their place don’t earn as much.

A yawning skills gap is another. Economists say a robust economy is drawing people back into the workforce, but this could be one of the factors holding down wage growth. “What businesses are having to do is they can’t find people with skills, so they have to hire them at unskilled wages and then train them,” said Dan North, chief economist at Euler Hermes North America.

The data bears this out: Compared to the topline unemployment rate of 3.9 percent, the broader U-6 measure of unemployment fell three-tenths of a percentage point to 7.5 percent in July, a percentage point lower than it was a year ago.

“Of course, the people hired without skills have lower productivity,” North added. The upshot is that unskilled workers aren’t being paid as much, which economists theorize could be holding down wage gains.

With fewer skills and lower productivity, these would be the workers most likely to lose out if companies have to start cutting jobs in response to a trade war-initiated slowdown. “I always worry about the quality of these jobs,” Kalleberg said. “There’s very little bargaining power on the part of workers.“

by Martha C. White / 

NBC News

March Retail Jobs Down from February but Up More Than 30,000 from 2017

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WASHINGTON–(BUSINESS WIRE)–Amid fluctuations in weather and spring holidays, retail industry employment fell by 6,400 jobs seasonally adjusted in March but showed an increase of 30,800 unadjusted year-over-year, the National Retail Federation said today. The numbers exclude automobile dealers, gasoline stations and restaurants. Overall, the economy added 103,000 jobs, the Labor Department said.

“March was weaker than February but the trend is in the right direction”

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“March was weaker than February but the trend is in the right direction,” NRF Chief Economist Jack Kleinhenz said. “This time of year can be quirky given weather and the timing of Easter and Passover. We should be pleased with the broader picture because the economy is growing, creating substantial job gains at this time during the expansion. Even with this month’s dip, retail employment is still substantially higher than the beginning of the year and this time last year. Retail has not taken a step backward.”

March’s numbers followed a monthly increase of 42,400 jobs in February over January. The three-month moving average in March showed an increase of 14,200 jobs. There were 711,000 job openings in the retail industry in January, the highest monthly figure ever.

Monthly gains were seen in non-store, which includes online and was up by 4,300 jobs from February; miscellaneous stores, up 4,100; furniture, up 2,000; building and garden supplies, up 1,900; and electronics and health/personal care, which were each up 1,700. Declines were concentrated in three sectors that had shown significant gains in February – general merchandise stores, down 12,600; clothing and clothing accessory stores, down 7,300; and grocery stores, down 3,200.

Economy-wide, average hourly earnings in February increased by 8 cents – 2.7 percent – year-over-year. The Labor Department said the unemployment rate was 4.1 percent, unchanged for the sixth straight month.

Kleinhenz noted that retail job numbers reported by the Labor Department do not provide an accurate picture of the industry because they count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centers, call centers and innovation labs.

About NRF

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private-sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.

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Contacts

National Retail Federation
J. Craig Shearman, 855-NRF-PRESS
PRESS@NRF.com

Retail sales gain is a sign tax reform may be working

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Retail winners and losers in 2018

Consumers are increasing their spending, which may be a plus for the stock market during a period of volatility. U.S. retail sales rose in March more than forecast after three straight monthly declines, with consumers buying more big-ticket items. This evidence of healthy sentiment could drive markets higher in the second quarter.

Retail sales increased 0.6% in March after a 0.1% drop in February, the Commerce Department reported on Monday. The January retail data was revised down to show that sales declined by 0.2%, steeper than the previously reported 0.1% dip.

Economists polled by Reuters had forecast that retail sales would rise by 0.4% in March. Year-over-year, retail sales increased 4.5%.

There have been hopes that with many Americans seeing their paychecks increase because of tax cut savings, consumer spending would climb. Such an increase, in turn, would be good for the economy overall, with more than two-thirds of U.S. economic growth attributed to consumer spending.

“These are strong numbers, no doubt surging from the shot in the arm tax reform provided,” said Mike Loewengart, vice president of investment strategy at E*Trade. “Consumers are seeing more in their paycheck, and it appears they’ve gone shopping—certainly good news for investors.”

Stock markets have gone through a volatile period and are seeking direction.

“With most earnings reports arriving in the next few weeks, this is a pivotal time for a market that is in search of something positive to latch on to,” Loewengart added. “It appears, at least at the moment, strong economic fundamentals just simply aren’t enough to fire the bull rally back up.”

National Retail Federaton Chief Economist Jack Kleinhenz called the retail sales report a “healthy spending report” despite market volatility, unseasonable weather and uncertain economic policies. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home value and judicious use of credit,” he said.

By RetailFOXBusiness

NRF: March Retail Sales Climb 5%, Three-Month Average Jumps 4.8%

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The March results build on the higher sales seen in February, which was up 0.2% over January and 4.3% year-over-year. These numbers exclude sales of automobiles and at gasoline stations and restaurants.

The NRF numbers are based on data from the U.S. Census Bureau, which said overall March retail sales — including automobiles, gasoline and restaurants — were up a seasonally adjusted 0.6% from February, and up 4.5% year-over-year.

“This is a healthy spending report despite market volatility, unseasonable weather and uncertain economic policies,” said NRF Chief Economist Jack Kleinhenz in a statement. “Consumers continue to show resiliency in spending, and these numbers reflect how the economy is performing with a strong job market, gains in wages, improvements in confidence, rising home values and judicious use of credit. The biggest risk to spending is in market fluctuations that could affect confidence, but we expect these basic improvements in economic fundamentals to continue.”

All sectors except sporting goods saw sales improvements in March on a year-by-year basis. Sporting goods stores saw sales declines of 0.9%.

  • Online and other non-store sales: up 7.6%;
  • General merchandise: up 6.3%;
  • Clothing and clothing accessories: up 6.1%;
  • Grocery and beverage: up 5.9%;
  • Furniture and home furnishings: up 4.1%;
  • Building materials and garden supplies: up 3.8%;
  • Electronics and appliances: up 1.6%; and
  • Health and personal care: up 0.4%.

Retail sales are up in April

Posted on by katiecmorgan

Retail sales data issued today by the United States Department of Commerce and the National Retail Federation (NRF) showed modest sequential gains and varying annual gains.

Commerce reported that April retail sales were up 0.3% annually at $497.6 billion and 0.8% ahead of March’s $496.1 billion. It also noted that total retail sales from February through April were up 4.6% annually.

April also represents the second straight month of retail sales gains, as March snapped a three-month stretch of declines from December through February.

Commerce reported that retail trade sales were up 0.4% in April over March and 4.8% annually. Non-store sales, which include e-commerce, saw a 9.6% annual gain. Furniture and home furniture sales were up 6.1% annually, and electronics ad appliance store sales were up 1.7%.

The NRF reported that April retail sales increased 0.4% on a seasonally adjusted basis compared to March and were up 2.8% annually. NRF’s data excludes retail sales from automobiles, gasoline stations, and restaurants.

“Retail sales growth remains solid and on track as households benefit from tax cuts even though they have faced unseasonable weather and bumpy financial markets,” NRF Chief Economist Jack Kleinhenz said. “The tax cuts and higher savings levels should help consumers afford the recent surge in gasoline prices. And a solid job market, recent wage gains and elevated confidence translate into ongoing spending support.”

NRF’s three-month moving average through April saw a 4.1% annual increase, which matches up with the organization’s estimate of 2018 retail sales rising between 3.8%-4.4% annually.

Various retail sectors saw solid performances in April based on NRF data, including:
● Online and other non-store sales were up 12.2 percent year-over-year and up 0.6 percent over March seasonally adjusted
● Furniture and home furnishings stores were up 5.8 percent year-over-year and up 0.8 percent from March seasonally adjusted
● Building materials and garden supply stores were up 5.6 percent year-over-year and up 0.4 percent from March seasonally adjusted
● Electronics and appliance stores were up 2.2 percent year-over-year but down 0.1 percent from March seasonally adjusted