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United States' Retail Sales To Slow Down in 2007
Jun 21, 2007

United States' retail sales for the year 2007 are estimated to slow down 4.8% over the previous year's (2006) 6.3%.

The retailers in US expect moderate gains in the H1 of 2007 while they are estimated to be subdued in H2, as per National Retail Federation's (NRF). It's expected that retail sales will increase by 3.8% in the first quarter and go up to 4.6% in the second Quarter, 5.2% in the third and reach 5.7% in the final quarter of 2007.

During the year 2006, industry sales were strong, but the quarterly pattern was dampened by the slowdown in housing, high costs of energy and lackluster employment growth, said federation economist Rosalind Wells in the news published on ABC News.

The 2006 retail sales increased above all projections, fueled by customer spending in the first six month. However in 2007, it is estimated that retailers catering to the mid-level and lower income consumers will find it difficult to raise sales over the year 2006 due to the soft housing market in US.

Retailers who sell garden equipment and building materials saw a sharp decline in the year 2006 from a 20 percent to 4.3 percent at the year end.

Rick McAllister, president and CEO of the state organization, agrees that the housing slump is having a ripple effect on the retail market. But, he says, departmental stores, specialty stores and pharmacies will continue to see strong gains, published in Sun-Sentinel.

As per an analyst at
RNCOS, "The US housing market is likely to slowdown resulting in reduced household wealth and consumption, however the slowdown shows that consumer spending slowed during spring season and remained low for rest of the year, after having a sizzling start in the beginning of the year, as Americans were hit hard by high prices of gasoline, distant housing market and high rates of interest."

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