American retailers predict sales will climb as much as 4.4 percent this year, to $3.8 trillion, as long as Washington manages to avoid self-inflicted economic wounds.
“The overall economy, in our view and based on the conversations we’ve had and the data we see, is very solid,” Matthew Shay, head of the National Retail Federation, told reporters on Tuesday. “The truth is the consumer is in a very good place and continues to be in a very good place, and consumer spending is obviously fundamental and central to our overall outlook.”
The industry is a crucial driver of the U.S. economy, contributing $2.6 trillion a year and employing 42 million workers, more workers than any other. Its optimism is fueled partly by revenue growth of 4.6 percent last year, higher than originally projected, despite trade disputes driven by the Trump administration that have pushed up supply prices and the drag from a government shutdown that may have cost the U.S. economy as much as $1.2 billion a week.
“The most important and fundamental job of our elected leaders is sort of the Hippocratic oath of, ‘First, do no harm,'” Shay said. “Job No. 1 is simply to stay out of our own way and avoid the sorts of self-inflicted mistakes that can have a negative impact on consumer confidence.”
The partial closure, the longest in U.S. history, began days before Christmas when President Trump refused to sign any government-funding bill that didn’t include $5.7 billion for a wall he promised to build along the U.S. border with Mexico, money that Congress refused to provide.
It wasn’t until Jan. 25 that lawmakers struck a deal with the White House to reopen shuttered offices for three weeks of negotiations as pressure mounted from unpaid workers, stalled approvals of new medicines, and widening air-travel disruptions. Some of the retail sales lost as 800,000 workers struggled to pay basic expenses like mortgages and car payments may not be recovered, the retailers warned, urging government leaders to avoid another shutdown once current funding ends on Feb. 15.
Trump, however, has expressed doubts that Congress can come up with a border proposal he finds acceptable, dangling the prospect of another shutdown, and industry leaders will monitor his State of the Union address on Tuesday for clues to his plans.
If the committee of Republicans and Democrats now meeting on Border Security is not discussing or contemplating a Wall or Physical Barrier, they are Wasting their time!
— Donald J. Trump (@realDonaldTrump) January 30, 2019
Retailers also oppose tariffs, which the Trump administration ramped up last year to press China to open more of its markets to U.S. businesses and end intellectual-property theft. The White House has imposed levies on $250 billion of goods from the world’s second-largest economy and threatened to more than double some of them if it can’t reach a trade agreement with Beijing by March 1.
