NRF's Retail Sales Outlook Predicts Economic Recovery Toward End of 2001

Retail Group Says Recessionary Fears Unwarranted



Apr 12, 2001, 01:00 ET from National Retail Federation

    WASHINGTON, April 12 /PRNewswire/ -- The National Retail Federation (NRF)
 says the U.S. economy is not in a recession and is anticipating an upswing in
 consumer behavior toward the end of 2001, leading into a "U" shaped recovery
 for the current economic slowdown.
     Writing for NRF's Retail Sales Outlook, NRF Chief Economist Rosalind Wells
 said,  "Although the economy was unquestionably weak in the first few months
 of 2001, we see signs that the malaise will end and that economic activity
 will improve in the second half of the year."
     Wells pointed to several factors for her positive long-term outlook
 including a stable housing market, the Federal Reserve's multiple interest
 rate cuts that will likely spark refinancing activity and put more money in
 consumers' pockets, and a still-positive job market.
     According to the Retail Sales Outlook, NRF's quarterly economic forecast,
 the contrast between the economy being in overdrive and screeching to almost a
 standstill is what is causing the pain.  Wells said the lack of a true decline
 in economic activity and the positive employment and income picture supports
 her assertion that the U.S. has avoided a true recession.
     Wells observed that the economy likely would not experience a fast bounce
 back, described by some economists as a "V" shaped recovery.  Rather, the
 economy will probably evince a "U" shaped recovery, with a few more quarters
 of growth below the economy's potential -- about 3.0 percent -- followed by
 stronger results toward the end of the year.
     Wells expects total consumer spending to grow 3.0 percent this year, less
 than the 5.3 percent of the last two years but still solid.  She also
 predicted that GAF sales (general merchandise, furniture and home furnishings)
 will grow 4.2 percent for 2001, compared to 6.8 percent in 2000.
     In general, Wells does not expect a sharp re-acceleration in the economy,
 rather a gradual improvement.  However, she remains upbeat about the retail
 industry's prospects in the near term.
     "Retailers will be faced with the challenges of less robust growth, but
 opportunities to excel will exist for those who factor the environment into
 their plans."
 
     The National Retail Federation (NRF) is the world's largest retail trade
 association with membership that comprises all retail formats and channels of
 distribution including department, specialty, discount, catalog, Internet and
 independent stores. NRF members represent an industry that encompasses more
 than 1.4 million U.S. retail establishments, employs more than 20 million
 people -- about 1 in 5 American workers -- and registered 2000 sales of nearly
 $3.2 trillion.  NRF's international members operate stores in more than 50
 nations.  In its role as the retail industry's umbrella group, NRF also
 represents 32 national and 50 state associations in the U.S. as well as 36
 international associations representing retailers abroad.
     For an electronic copy of the April 2001 Retail Sales Outlook newsletter
 in PDF format, please contact Sarah Scheuer at 202-626-8189.
 
     For more information about NRF, visit the Web site at http://www.nrf.com .
 
 

SOURCE National Retail Federation
    WASHINGTON, April 12 /PRNewswire/ -- The National Retail Federation (NRF)
 says the U.S. economy is not in a recession and is anticipating an upswing in
 consumer behavior toward the end of 2001, leading into a "U" shaped recovery
 for the current economic slowdown.
     Writing for NRF's Retail Sales Outlook, NRF Chief Economist Rosalind Wells
 said,  "Although the economy was unquestionably weak in the first few months
 of 2001, we see signs that the malaise will end and that economic activity
 will improve in the second half of the year."
     Wells pointed to several factors for her positive long-term outlook
 including a stable housing market, the Federal Reserve's multiple interest
 rate cuts that will likely spark refinancing activity and put more money in
 consumers' pockets, and a still-positive job market.
     According to the Retail Sales Outlook, NRF's quarterly economic forecast,
 the contrast between the economy being in overdrive and screeching to almost a
 standstill is what is causing the pain.  Wells said the lack of a true decline
 in economic activity and the positive employment and income picture supports
 her assertion that the U.S. has avoided a true recession.
     Wells observed that the economy likely would not experience a fast bounce
 back, described by some economists as a "V" shaped recovery.  Rather, the
 economy will probably evince a "U" shaped recovery, with a few more quarters
 of growth below the economy's potential -- about 3.0 percent -- followed by
 stronger results toward the end of the year.
     Wells expects total consumer spending to grow 3.0 percent this year, less
 than the 5.3 percent of the last two years but still solid.  She also
 predicted that GAF sales (general merchandise, furniture and home furnishings)
 will grow 4.2 percent for 2001, compared to 6.8 percent in 2000.
     In general, Wells does not expect a sharp re-acceleration in the economy,
 rather a gradual improvement.  However, she remains upbeat about the retail
 industry's prospects in the near term.
     "Retailers will be faced with the challenges of less robust growth, but
 opportunities to excel will exist for those who factor the environment into
 their plans."
 
     The National Retail Federation (NRF) is the world's largest retail trade
 association with membership that comprises all retail formats and channels of
 distribution including department, specialty, discount, catalog, Internet and
 independent stores. NRF members represent an industry that encompasses more
 than 1.4 million U.S. retail establishments, employs more than 20 million
 people -- about 1 in 5 American workers -- and registered 2000 sales of nearly
 $3.2 trillion.  NRF's international members operate stores in more than 50
 nations.  In its role as the retail industry's umbrella group, NRF also
 represents 32 national and 50 state associations in the U.S. as well as 36
 international associations representing retailers abroad.
     For an electronic copy of the April 2001 Retail Sales Outlook newsletter
 in PDF format, please contact Sarah Scheuer at 202-626-8189.
 
     For more information about NRF, visit the Web site at http://www.nrf.com .
 
 SOURCE  National Retail Federation