In light of the continuing psychological and economic impact of recent terrorist attacks in the U.S., the National Retail Federation (NRF) has revised retail sales forecasts for the fourth quarter and the winter holiday season.
According to NRF’s forthcoming Retail Sales Outlook report on general merchandise, apparel, furniture, home furnishings, electronics and appliance stores (GAF) sales growth for the fourth quarter has been revised to 2.2% compared to the previously forecasted 4%. In addition, NRF is predicting 2001 holiday retail sales to increase 2.5 to 3.0%.
“Since the terrorist attacks are so fresh and our country’s response not yet known, it is premature to make definitive judgments about the economy,” says NRF Chief Economist Rosalind Wells. “We can only speculate based upon what we think the Administration will do and how consumers will respond.”
The report states that the Bush administration and the Federal Reserve are working together and will take actions to stabilize the present situation. It states that the Fed has already taken steps to inject liquidity into the financial systems, and the administration is considering a further economic stimulus package.
“Recession remains a possibility, however we feel that the strong underpinnings of the U.S. economy and the resilience of the U.S. consumer will force the stalling growth over the next few months to give way to a rebound beginning next year,” says Wells. According to NRF members, consumers are out shopping but are purchasing a limited range of products.
“With a few notable exceptions, such as American flags, consumers are currently focusing on basics, buying out of necessity not desire,” said NRF president and CEO Tracy Mullin. “We expect consumer spending patterns to begin to return to normal levels as the holiday season approaches.”