Aug. 3, 2021 — The National Retail Federation (NRF) has addressed Covid-19 vaccination and its potential effects on economic recovery.

“We are now in the second half of 2021, and the economy has heated up along with the summer temperatures,” says Jack Kleinhenz, NRF chief economist. “Gross domestic product surpassed its precrisis peak during the second quarter, and vigorous growth is expected throughout the rest of the year. It is a very different year from 2020, and a much better one. The economic momentum has been helped by government monetary and fiscal policies and, more importantly, the rollout of Covid-19 vaccinations.”

“Vaccination is the key to further economic recovery, reopening, and rebuilding,” Kleinhenz continues. “With the outlook for the global economy continuing to hinge on public health, vaccine numbers are extremely important, not just for the United States, but for the whole world.”

The statement coincides with news on Tuesday that New York City will require proof of vaccination for restaurants, gyms, and indoor venues. Enforcement of the policy in the city is scheduled to begin on Sept. 13.

The August issue of NRF’s Monthly Economic Review noted that 57% of the U.S. population had received at least one dose of the Covid-19 vaccine. In addition, the Blue Chip Economic Indicators report revealed that faster vaccination is the greatest opportunity for economic growth.

Trendspotting in the July/August issue of EB revealed insights to masks and vaccinations specific to eyecare practices. 

According to NRF data, Q3 2021 data currently reflects prepandemic activity. Furthermore, June’s 18% year-over-year increase in retail sales included gains for department, clothing, and electronics stores, which all experienced weak sales a year ago. Back-to-school shopping will also aid with sales in those sectors. Retail sales align with NRF’s revised forecast for the year (that 2021 will grow between 10.5% and 13.5% over 2020). 

“This is the fastest pace of expansion in decades, but it comes with aches and pains,” shares Kleinhenz.

The NRF revealed that there are approximately 7 million fewer workers on payrolls than just before the pandemic. This labor shortage coupled with supply chain disruptions causes higher prices. In addition, Kleinhenz shared that inflation expectations “can become self-fulfilling,” with workers calling for higher wages if they expect prices to go up—thus causing a continuous cycle as employers are forced to raise prices. The Federal Reserve index forecasts an inflation of 2.75% over the next year. Kleinhenz shared that although inflation should peak in the next few months, it is unlikely inflation will last for more than a year.