The May issue of the National Retail Federation’s (NRF) Monthly Economic Review paints a picture filled with optimism for the months ahead.
Armed with current data, the NRF expects the U.S. economy to spike 6.6% this year, the biggest boom in growth since the 7.2% rise of 1984, according to NRF Chief Economist Jack Kleinhenz.
“While there is a great deal of uncertainty about how fast and far this economy will grow in 2021, surveys show an increase in individuals being vaccinated, more willingness to receive a vaccination, increased spending intentions, and comfort with resuming pre-pandemic behaviors like shopping, travel and family gatherings,” Kleinhenz says. “This feel-better situation will likely translate into higher levels of household spending, especially around upcoming holidays like the Fourth of July and spending associated with back-to-work and back-to-school.”
While overall growth is expected, toy industry numbers are starting to run up against difficult comps as pandemic spending during lockdown skewed the data. Kleinhenz calls these anomalies “outsize swings,” and says that many industries will be affected by skewed economic data, not just from the pandemic, but also “hurricanes, wildfires, and other events [that] will make year-over-year comparisons difficult during 2021.”
Additionally, the NRF says that the latest edition of the Federal Reserve’s Beige Book affirms the acceleration of the U.S. economy, thanks to stimulus checks and tax refunds hitting bank accounts.
“Consumers are sitting on a stockpile of cash that could become a spring-loaded spending mechanism,” according to Kleinhenz.
The NRF believes that 2021 retail sales should spike between 6.5% and 8.2% this year.
First-quarter toy industry sales numbers are expected to be released by The NPD Group any day now.
