New York (AFP)
US retailers projected solid sales in 2020 Wednesday despite uncertainty over the coronavirus that has thrashed global equity markets in recent days.
Global markets have gyrated this week as the virus has spread to additional countries and raised concerns about the economic hit from the sorts of lockdown measures that have limited travel and industrial production in China.
Many companies have warned that their bottom line will feel the impact, at least in the current quarter, but the National Retail Federation forecast sales gains of between 3.5 percent and 4.1 percent to more than $3.9 trillion for 2020, pointing to a solid labor market and low interest rates that have been the linchpin of the US economy since the 2008 financial crisis.
“The nation’s record-long economic expansion is continuing, and consumers remain the drivers of that expansion,” said NRF President Matthew Shay in a press release.
“There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way.”
At a large toy trade show earlier this week, some companies said their plants in China were still closed or operating at only 20 or 25 percent, constrained by a lack of workers and raw materials.
NRF officials said it was impossible to generalize about the impact of the virus on retailers, and it remains premature to expect shortages of goods.
Shay pointed to “positive signs from China” in recent days that have raised hopes that supply chain effects will not be prolonged, adding that “the disruption to be less severe than originally expected.”
NRF Chief Economist Jack Kleinhenz said the US companies have had more time prepare for the virus than countries that were hit earlier.
He also said it was “fortunate this is occurring where we are, in a fairly solid state of the economy,” adding that the damage would have been worse had the epidemic happened between 2007 and 2009 when US unemployment was much higher due to the global financial crisis.