THE SHOP

January '19

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6 THE SHOP JANUARY 2019 arly indicators appear to show another strong year for retail sales as small businesses look to get a jump on 2019. Retailers are predicted to enjoy brisk economic tailwinds throughout the year. A strong labor market will inspire liberal spending, while a robust business climate fuels higher corporate profits. At the same time, economists are starting to see early signs of an inevitable correction. "The coming 12 months should be a good year for retailers," says Scott Hoyt, senior director of consumer economics for Moody's Analytics (economy.com). "Core retail sales (which exclude the volatile auto and gasoline segments) are expected to grow a healthy 4.7 percent in 2019." Happy shoppers are driving the favorable retail environment. "Consumers seem to be euphoric right now," says Hoyt. "The fiscal stimulus in the form of tax cuts, as well as the tight job market, means there are very few negatives when it comes to consumer fundamentals." SLOW STARTER The healthy consumer sentiment reflects the energies of a larger economy that is still growing. "The business cycle has entered its boom phase," says Sophia Koropeckyj, managing director of industry economics at Moody's Analytics. The Gross National Product (GNP), the most commonly accepted measure of economic growth, is expected to grow at a 2.7-percent clip in 2019. Despite the generally sunny outlook, however, that number actually represents a modest deceleration from the 3.0-percent growth anticipated when numbers are finally tal- lied for 2018. And the 2019 retail sales growth estimate Economic 2019 is trending up, but for how long? Riding the BOOM Early indicators appear to show another strong year for retail sales as small businesses look to get a jump on 2019. By Phillip M. Perry E

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