(Adds details from conference)
March 29 (Reuters) - Retail sales in the United States
are expected to grow at a slower pace this year, the National
Retail Federation (NRF) said on Wednesday, as fears of a
recession and tremors in the banking industry cast a shadow over
a recovery in consumer spending.
The trade body said it expects retail sales to rise between
4% and 6% to up to $5.23 trillion, in comparison to 7% growth in
2022 to $4.9 trillion.
The forecast comes even as NRF noted consumer spending held
up fairly well in the first quarter of the year, thanks to a
strong labor market, wage growth and savings built over the
pandemic
Americans are sitting on about a trillion dollars in excess
savings -- as higher-income households delayed big-ticket
purchases in the face of inflation -- and are likely to continue
to spend on goods and services in a reopening economy, NRF CEO
Matthew Shay said, but added that sales would still be moderate.
Last year, the retail industry took a beating due to
stubbornly high inflation and dwindling discretionary budgets at
American households that left companies ranging from Walmart Inc to Macy's Inc with excess inventories.
While inflation is showing signs of cooling, NRF projected
it will remain between 3% and 3.5% for all goods and services
for the year.
"It's kind of a surprise that we've had some strength (in
retail sales) in the first couple of months. But it's also too
early to know the lagged effect of interest rate (hikes) and...
the banking sector turmoil," NRF Chief Economist Jack Kleinhenz
said on a press call.
The global banking sector is staring at the biggest crisis
since 2008 following the collapse of two U.S. lenders and the
rescue takeover of Credit Suisse , which ratcheted up
fears of a contagion.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shinjini
Ganguli)
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