Some retailers are heading into 2019 concerned about the uncertainty of the economy, according to Janet Yellen, the former chair and board of governors for the Federal Reserve System. Yellen was speaking to a packed crowd of retailers at the NRF Big Show in New York City today.
While the global economy was firing on all cylinders in 2018, in 2019, "almost all economists are focused on a slowdown of a little bit over 2 percent," Yellen said. "We will have a fiscal boost, but less of a fiscal boost."
Trade tensions, Yellen said, including the ongoing trade war between China and the U.S., are what's really concerning retail businesses.
"We're hearing anecdotal reports about businesses beginning to put investment plans on hold because of the uncertainties they're facing in the global environment around supply chains and trade," Yellen told CNBC's Steve Liesman, who moderated the panel session.
Still, Yellen wasn't totally negative in her outlook for 2019. She said, based on data for 2018, the economic outlook is generally positive for consumers and businesses.
“All of the hard data we have on economic activity suggests things are in good shape,” Yellen said. “We probably had a year with 3 percent overall growth. And [for] consumer spending, in a year as a whole ... we probably had 3 percent consumer spending growth on inflation-adjusted terms.”
Yellen also said the fundamentals regarding consumer spending also look excellent. “We had over 200,000 jobs a month for the year, and that is 2.6 million for the year as a whole. Wages are growing by around 3 percent, and when you add tax cuts and [the fact that] gas prices are down, everything looks good."
Total Retail’s Take: A new year is upon us, and the momentum retailers were experiencing in 2018 has begun to fade. Yellen's words of caution mirror that sentiment. While last year's news reports focused on record-low unemployment rates and consumers happy to open up their wallets to shop, this year may well see a slowdown. Yellen's comments come on the heels of a handful of major retailers, including Macy's and Kohl's, reporting disappointing holiday sales last week. Analysts and investors had been expecting retailers to report more upbeat holiday sales, considering strong consumer confidence levels in the U.S. last holiday season.