Unexpected slow growth during the first half of the year has caused the National Retail Federation (NRF) to lower its retail sales forecast for 2015.
Although growth has been slow so far this year, NRF expects sales to increase steadily throughout its remainder. The initial forecast in February anticipated retail sales to grow 4.1% over last year, but today’s revision lowers the forecast to 3.5%.
NRF calculated that sales grew 2.9% during the first half of 2015 and are expected to grow at a more positive pace of 3.7% over the next five months. The estimates include general retail sales and non-store sales, and exclude automobiles, gas stations and restaurants. Revised non-store sales are now expected to grow between 6-8%, still within the 7-10% range originally forecast.
“For years consumer spending has been hampered by lackluster growth in our economy. Much of that blame can be shifted to Washington where too much time has been spent crafting rules and regulations that almost guarantee negative consequences for consumers and American businesses alike,” said NRF President and CEO Matthew Shay. “Until the government and our elected leaders get serious about enacting policies that lift consumer confidence, create economic growth and spur investment, we will continue this trend of solid, but not exceptional, performance in the economy.”
“Despite all of these hurdles, we are optimistic that consumer spending during the second half of the year will benefit from recent improvements in the housing and labor markets along with lower energy costs, and believe consumer confidence will grow enough to bolster retail purchases for the year,” said Shay.
“A confluence of events, including treacherous weather throughout the United States through most of the winter, issues at the West Coast ports, a stronger U.S. dollar, weak foreign growth and declines in energy sector investments all significantly and negatively impacted retail sales so far this year, and thus have changed how future sales will shape up for the rest of 2015,” said NRF Chief Economist Jack Kleinhenz. “Additionally, household spending patterns appear to have shifted purchases toward services and away from goods, though this may be transitory. Additionally, a deflationary retail environment has been especially challenging for retailers’ bottom lines.”