Economic uncertainty continues to dampen shopper enthusiasm and drive down retail sales growth in 2014, according to one industry trade group.
The National Retail Federation lowered its retail sales forecast for 2014 after shoppers were slow to spend in the first half of the year. Sales are expected to grow 3.6% in 2014 from last year, down from a previous estimate of 4.1%
“No retailer was immune to the doldrums witnessed during the first quarter, and as a result, the year’s trajectory was impacted,” said Matthew Shay, the retail group’s chief executive.
Although consumer confidence has climbed, slow income growth, uneven housing demand and cautious business spending continues to drag down shopper spending, the trade group said. Sales grew only 2.9% in the first half of 2014.
However, the forecast looks brighter for the rest of the year, which includes the crucial holiday shopping season. Analysts said that increased hiring and other signs of economic progress could contribute to growth of at least 3.9% in the second half of 2014.
Jack Kleinhenz, the retail group's chief economist, cautioned that growth would probably continue "at a modest to moderate pace."
"I don't expect the economy to come roaring back,” he said in a blog post.
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