Retail Sales & Consumer Spending Forecast

Economic Forecasts

Surprising Strength in Consumer Spending

Kiplinger’s latest forecast on retail sales and consumer spending


GDP 2.6% growth in '19 More »
Jobs Job gains of about 175,000 per month in '19 More »
Interest rates 10-year T-notes at 2.8% by end ’19 More »
Inflation 2.0% in ’19, up from 1.9% in ’18 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $60 to $65 per barrel in August More »
Housing 5.35 million existing-home sales in ’19, up 0.2% More »
Retail sales Growing 4.3% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

Retail sales grew a solid 0.6% in May, while April data was revised into the black, 0.3%. General merchandise sales are continuing their strong run. Motor vehicle sales were expected to slow but keep surprising analysts. Restaurant sales are surging again after a hiatus last fall. While building materials, clothing and groceries have been flat recently, consumers appear to have picked up their spending pace in general.

Good wage growth and low unemployment should mean better retail sales this year. We expect sales, excluding gasoline and autos, to increase 4.3%, a bit lower than 2018’s 4.6% bump. E-commerce sales will continue rising aggressively, probably by 12%—the 10th straight year of double-digit increases. In-store sales will rise, though only by about 2.6%.

Restaurant sales are picking up. Over the past year, sales have roughly mirrored the stock market’s performance. The stock market has risen 15% so far and has likely contributed to consumers’ willingness to eat out. But expect 2019 sales growth to be 3.9%, down from 2018’s strong 6.1%.

Department and clothing stores are holding their own for the moment, but their total sales are expected to fall as stores continue to close, especially at mall locations. Sears and Kmart will shutter 120 stores this year; J.C. Penney, 27. Other store closings: Payless Shoe, 2,100; Gymboree, 800; Dressbarn, 650; and Charlotte Russe, 512.

Source: Department of Energy, Price Statistics