(Reuters) - U.S. holiday sales in 2019 are expected to be higher than a year earlier, the National Retail Federation said on Thursday, even as the retail sector grapples with fears of slowing global growth due to an ongoing U.S.-China trade war.
Sales in 2019 are estimated to grow between 3.8% and 4.2% to a range of $727.9 billion to $730.7 billion, the retail trade group said. That compares with sales of $701.2 billion, or 2.1% growth, in 2018.
The forecast comes at the start of a tense fourth quarter as latest data points to the U.S. economy sliding into a recession.
“There has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors and political rhetoric,” NRF Chief Executive Officer Matthew Shay said in a statement.
The tariffs on Chinese goods have now extended to consumer products such as flat panel television sets, cotton sweaters, bed linen and many types of footwear.
“There are many moving parts and lots of distractions that make predictions difficult,” NRF Chief Economist Jack Kleinhenz said.
“There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year.”
Retailers are expected to benefit during the holiday period, which typically generates a majority of their annual sales and profit, from near record low unemployment and steady wage growth.
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This year’s shopping period, which includes Black Friday, Christmas and New Year, however, is the shortest since 2013.
The group also estimated seasonal hiring by retailers to be between 530,000 and 590,000 workers, compared with 554,000 in 2018.
U.S. retailers have also released holiday hiring numbers.
Macy’s Inc (M.N) said earlier in the day it would employ 80,000 seasonal workers, unchanged from last year, while Target Corp (TGT.N) said last month it planned to hire about 130,000 store employees, 10,000 more than 2018.
NRF’s forecast is one of the most closely watched benchmarks and follows estimates from other market research firms such as AlixPartners and Deloitte.
AlixPartners has forecast holiday sales to rise between 4.4% and 5.3%, while Deloitte expects a 4.5% to 5% increase.
Holiday sales grew a lower-than-expected 2.9% in 2018, NRF said in February, pressured by turmoil over trade and a government shutdown. The group has revised the growth rate to 2.1% after revisions to data by the government.
NRF’s holiday retail sales forecast excludes automobiles, gasoline stations and restaurants, while considering indicators such as employment, wages and consumer confidence.
Reporting by Akanksha Rana and Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva