“Slower Trajectory” Seen for Retail Spending

U.S. retail sales during 2025 will grow between 2.7% and 3.7% over 2024 to between $5.42 trillion and $5.48 trillion, the National Retail Federation predicts. The NRF disclosed those numbers during its fifth annual “State of Retail & the Consumer” virtual event on the health of American consumers and the retail industry.

“Overall, the economy has shown continued momentum so far in 2025 — bolstered by low unemployment and real wage gains — however, significant policy uncertainty is weighing on consumer and business confidence,” said NRF President and CEO Matthew Shay.

In a similar vein, NRF Chief Economist Jack Kleinhenz said even though consumer confidence is declining, due largely to lingering inflation and consumers’ anxiety over tariffs, that doesn’t mean there will be an immediate drop in consumer spending.

“It’s the hard data on employment, income and tariff-induced inflation — not consumer sentiment — that supports our view of a slower trajectory for consumer spending,” he said.

The 2025 sales forecast compares with 3.6% annual sales growth of $5.29 trillion dollars in 2024. This year’s forecast is also in line with the 10-year pre-pandemic average annual sales growth of 3.6%.

“Any way you look at it, a lot is riding on the consumer,” Kleinhenz said. “While we do expect slower growth, consumer fundamentals remain intact, supported by low unemployment, slower but steady income growth, and solid household finances. Consumer spending is not unraveling.”

NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants to focus on core retail. The 2025 retail sales forecast is based on economic modeling that considers a variety of indicators including employment, wages, disposable income, consumer credit and previous retail sales. NRF produces forecasts and other analyses using data from a range of U.S. government sources as well as the CNBC/NRF Retail Monitor, powered by Affinity Solutions.

Click here for more from the NRF outlook.