NEW YORK, Jan. 16 (Xinhua) -- U.S. economists and industry experts believe solid growth in the consumer sector in the United States last year was attributable to strong economic fundamentals and consumer confidence.
"If you look around, there are lots of positives for consumers, and therefore we see pretty high levels of consumer confidence. And when consumers are confident, they buy things," Mark Matthews, vice president of research development and industry analysis at the National Retail Federation (NRF), told Xinhua in an interview on the sidelines of Retail's Big Show 2020, the NRF's annual expo.
"I think people are willing to spend because they have jobs, they have income and they have the ability to spend," said Matthews. "And it's very important to remember that interest rates are very low, so money is cheaper."
Steve Blitz, chief U.S. economist at TS Lombard, echoed Matthews, saying that he believes the stock market plunge at the end of 2018 and the volatility in early 2019 made households wrap up their savings and cut spending, which created a backlog of demand.
When they saw equity markets bounce back and prices stabilize, which combined with other positive economic signs and "created a more positive view," U.S. consumers "spent down that savings through the course of the year (2019)," Blitz noted.
Rachel Bonsignore, senior consultant at GfK Consumer Life, said she believes that individual empowerment in the retail market gives consumer a greater say and freedom in decision-making.
"They have more access to information about brands, they have more control over what they can buy, where they can buy it from. They feel confident about choosing what's best for them," Bonsignore said, adding that she thinks "that's one of the driving forces."
Consumption has been the engine for U.S. economic growth throughout 2019. Jack Kleinhez, chief economist at the NRF, said in the latest NRF Monthly Economic Review that "the consumer remains the linchpin to growth."
"Households continue to be supported by a solid labor market, rising disposable income and strong balance sheets, which when combined explained elevated consumer confidence," Kleinhez added.
The U.S. Census Bureau released on Thursday the advance estimates of U.S. retail and food services sales for December 2019, showing the number increased 0.3 percent from the previous month, and 5.8 percent above the same period a year ago. Total sales for 2019 grew 3.6 percent year on year.
According to government data, NRF's report on U.S. holiday retail sales in 2019 grew 4.1 percent over the same period in 2018, including a 14.6 percent growth of online and other non-store sales over the year before.
The NRF expects a steady growth going forward. "This is a consumer-driven economy, and by any measure, the consumer has put the economy in a solid position for continued growth," NRF President and chief executive officer Matthew Shay said.
But in terms of the outlook of consumer spending, Blitz is cautious. "I think spending is going to slow down in line with growth and income. Now that backlog has been spent. It doesn't mean consumers are going to stop spending. It just means that what drives spending, which is the money to spend, is now growing more slowly."
In spite of historic low unemployment rate, wage growth in 2019 was not as satisfactory. Statistics released by the U.S. Bureau of Labor Statistics showed that in December 2019, average hourly earnings for all employees on private nonfarm payrolls inched up only three cents, or 0.1 percent, from the previous month. The growth rate of average hourly earnings in 2019 was 2.9 percent.
Bank of America Global Research analysts believe the December job report was "a general disappointment" and subdued wage growth was a "bigger negative surprise."