Recent forecasts from the National Retail Federation (NRF) predict U.S. retail sales will grow modestly in 2025, between 2.7% and 3.7%. This comes amid rising concerns regarding tariffs potentially squeezing advertising budgets. NRF's Chief Economist emphasized that the outlook is driven by hard data including employment and inflation figures rather than consumer sentiment. Deloitte's projections mirror this cautious stance, estimating a 3.1% increase in consumer spending. Both organizations warn that significant tariff increases could lead to a broader economic slowdown, negatively affecting future retail performance.
When margins are tight, advertising is often among the first things businesses cut as they try to balance spending money and encouraging sales.
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.
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