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Economic Forecasts

Retail Sales Growth Slows a Bit

Kiplinger's latest forecast on retail sales and consumer spending


GDP 2.1% growth in ’17, following 1.6% in ’16 More »
Jobs Hiring pace should slow to 175K/month in '17 More »
Interest rates 10-year T-notes at 2.4% by end '17 More »
Inflation 1.6% in '17, down from 2.1% in '16 More »
Business spending Rising 3%-4% in ’17, after flat ’16 More »
Energy Crude trading from $40 to $45 per barrel in September More »
Housing 6% price growth by end of '17 More »
Retail sales Growing 3.5% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, after nearly flat '16 More »

Sales paused in May, washing out April’s momentum. As a result, growth in sales, excluding gasoline, is likely to rise by 3.5%, falling below its 3.8% pace in 2016. Strong e-commerce and building materials sales will not be enough to compensate for the slowdown in motor vehicle and restaurant sales. Auto sales peaked in December, while restaurant receipts appear to have plateaued this spring.

E-commerce continues to gobble up the retail gains. E-commerce sales will grow 15% this year, compared with 13% in 2016. The flip side of strong e-commerce gains is that in-store sales will pick up only gradually, at about a 2% rate. However, a strong headwind is that department store sales are sliding again, possibly linked to announced store closures by various chains.

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Building materials are having a strong year, mirroring the strength in housing construction in general. They are expected to grow 7.3% in 2017.


Food service sales are slowing to a more sustainable growth pace this year: 2.7%, down from 5.5% in 2016. Labor shortages will make expansion difficult for some chains, and higher minimum wage laws will boost menu prices.

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Source: Department of Energy, Price Statistics