New York City Retail sales are expected to rise at the slowest pace in six years as shoppers worry about a slumping housing market and slower job growth, according to the National Retail Federation (NRF). The retail trade group released its 2008 economic outlook at its annual conference in New York City on Monday.
Total retail sales are slated to grow 3.5%, falling below last year's estimated 4.0% pace and marking the weakest growth since 2002, when retail sales climbed 3.0%, the NRF said. The retail sales figure excludes automobiles, gas stations and restaurants. The final 2007 figure won't be known until Tuesday when the Commerce Department is slated to report December's total retail sales figures.
“The consumer is full of anxiety,” said Rosalind Wells, chief economist at NRF, noting a number of financial pressures that are weighing on shoppers, from higher gas costs to tightening credit. “Retailers will once again be forced to market to more practical consumers, many of whom will be looking to trade down. Even areas of past high growth like luxury goods and online shopping will feel the pressure. In 2008, the challenges will be formidable for everyone.”
Wells expects sluggish sales in the first half of the year to eventually give way to strong sales in the third and fourth quarter, as she believes that a move by the Federal Reserve to further cut interest rates will help revive the economy.