The National Retail Federation's (NRF) announcement yesterday that it was projecting a sales increase of 3.9 percent for November and December suggested retailers could look forward to good, if not great, results this holiday season. The NRF press release, however, came with a caveat.
"Our forecast is a realistic look at where we are right now in this economy — balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years," said Matthew Shay, president and CEO of NRF, in a statement. "Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we've already made."
The decision by the GOP leadership in the House of Representatives earlier this week to not allow a floor vote on a so-called "clean CR" has left the two houses of Congress at an impasse resulting in a shutdown of much of the federal government.
The shutdown, according to Goldman Sachs, will take 0.2 percent out of the national economy every week that it goes on. Many business leaders, traditional allies of the GOP, are urging Republican to find a way to reopen the government and responsibly address the debt limit situation. The political circus around the last round of debt limit discussions in 2011 led Standard & Poor's to lower the credit rating of the U.S.
In a letter to the House of Representatives sent before the shutdown this week, the U.S. Chamber of Commerce, citing support from 251 organizations including NRF, National Grocers Association, National Restaurant Association and Retail Industry Leaders Association, wrote: "With the U.S. economy continuing to underperform, the federal government needs to maintain its normal operations pending a successful outcome of broader budgetary reforms. It is not in the best interest of the employers, employees or the American people to risk a government shutdown that will be economically disruptive and create even more uncertainties for the U.S. economy. Likewise, we respectfully urge the Congress to raise the debt ceiling in a timely manner and remove any threat to the full faith and credit of the United States government."
Will retail holiday sales hit the 3.9 percent growth mark projected by the NRF with the current strife ongoing in the nation's capital?