Citing revised figures from government sources, the National Retail Federation (NRF) is now projecting that 2017 retail sales will increase by only 3.2% to 3.8% compared to 2016, less than the 3.7% to 4.2% growth that was forecast back in February.
“Meaningful revisions to retail sales numbers by the Census Bureau and similar revisions to personal income and consumption by the Bureau of Economic Analysis have both affected our forecast,” said NRF Chief Economist Jack Kleinhenz in a statement. “While weaker-than-expected spending in the first quarter along with decelerating inflation has also contributed to the revision, NRF anticipates stronger sales heading into the fall and holiday seasons.”
In July, the International Monetary Fund (IMF) lowered its economic growth forecast for the entire U.S. economy to 2.1% for both 2017 and 2018. In April, the organization had predicted 2.3% growth for this year and 2.5% for 2018.
At this point it’s not clear what the net economic impact of Hurricanes Harvey and Irma will be. The post-storm cleanups are likely to provide a boom for home improvement retailers and auto dealerships, but if gas prices remain high it could dampen holiday sales by eating into consumers’ spending power. The NRF forecast does not include automobiles, gas stations and restaurants.