How the National Retail Federation views the post-election economy

Today I interviewed Matt Shay, President and CEO of the National Retail Federation (NRF) and Jack Kleinhenz, Chief Economist of the NRF. The NRF is the largest trade association in the retail sector and works closely with all administrations on both sides at the highest levels to advise them on positions in the retail sector. Shay stressed that “there has never been a president that we agree with 100% of the time, but … we will [in the future] what we’ve always done … we’ve worked with the Clinton, Bush, Obama and Trump administrations and … we’ve found a way to … support our priorities. ”

On the economy, the pandemic, the recovery

Shay told me: “Many families are facing problems, but this is not 2009 where there was no ongoing consumption, there is still robust consumption.” Speaking of a recovery, he says, “the way to restore economic health is to defeat the pandemic and this should be our number one priority.” But he disagrees with broad blockades as a strategy to defeat the pandemic. “Our priority is to keep the economy open and we should be able to take this case to both administrations … There is nothing inherently dangerous about being in a retail environment … We are just unsafe behavior … We must be looking at the experience of the last six months … Being in a grocery store or pharmacy should be no different from a shopping mall or restaurant … We shouldn’t make arbitrary decisions about be open [or] closed based on what is sold, but [based on what safety precautions go on]… within those places … We encourage both potential presidents to think about doing things responsibly to … keep the economy open. “If you are an employee of a retailer who has been forced to close , Shay says, “Your job is as essential to you as it is to your neighbor who works in a different kind of shop.”

Kleinhenz, the economist, discussed unemployment and the retail industry. “The unemployment claims numbers … suggest that people will go back to work and [that] people [who are] job seekers are getting work. There are many jobs in the retail sector that are not being filled. There is a good amount of hiring due to the holidays. “Kleinhenz also believes that retail is benefiting from” dollars that would have been spent … in service sectors like travel and restaurants. [So] there are extra dollars they can spend on retail products and this will continue for some time. ”

On stimulus

But there is a limit, Kleinhenz says, to how much retail can benefit from the decline in other sectors. “You don’t need more laptops … or furniture once purchased [them] but this has helped to push consumption [until now]. “

“We think there should be more stimulus because small and medium-sized businesses … and schools and the health system need support,” Shay said. He added that NRF is in favor of additional funds for PPPs, reduced restrictions on the Federal Reserve’s main lending program, and budget support for state and local governments. Kleinhenz states that as long as the virus is among us, “a stimulus is needed to maintain the momentum of the ongoing recovery … the path of recovery will be determined by the path of the virus.”

Shay believes that the retail sector will also benefit from a government investment in national infrastructure and that it will “benefit all Americans.” He explains it, “because retailers import large quantities of goods that come from abroad and travel on highways, bridges and roads [as do] customers who go to stores … we think an infrastructure investment is important and both candidates supported it [although] there is a difference in the package size and how you pay for it. ”

Due to the high probability of a divided government with a Democratic president and a Republican senate, Kleinhenz said a “small” stimulus is the most likely outcome, in the $ 500 billion range. With the elections now over, Kleinhenz thinks it could also happen during the duck season. He believes that a small stimulus could also “be just the first step towards another action [or] it could be a down payment [on future stimulus legislation]. “

On taxes, work, tariffs and trade

Shay believes that with regards to taxes and labor regulations, “there have been opportunities for us to work with the Trump administration to create a competitive, sensible and streamlined framework” and that the 2017 tax cut was very important. to “keep the retail sector healthy and successful.” With a Biden administration, Shay believes taxes and labor “could be two areas where … we may have different perspectives and not find common ground.” . But Kleinhenz believes that with the party’s likely split between the Senate and the presidency, it is “unlikely that we will see substantial fiscal changes. [in a Biden administration]. “

On tariffs and immigration it is the opposite. “It is our opinion that the Trump administration’s one-sided approach to many of our trade relations has not been beneficial to consumers and has not been overall good for our economy … In immigration we [also] I didn’t have a similar philosophy. “On those areas, Shay believes” there may be opportunities to work with a Biden administration … in ways we haven’t been able to work with the current administration. “

Who they support for the president

Shay was recently awarded the 2020 trade association’s CEO of the year award. So there’s no point asking him who he voted for, he’ll never say it as the NRF has to work with all parties. In this environment, we could probably use more of them in the NRF’s Washington, DC neighborhood to address everything that is happening right now in the country.