Retail's recovery isn't quite assured just yet. At least not according to the National Retail Federation, which downgraded its 2017 forecast for retail sales this week to a growth rate between 3.2% to 3.8%.
The NRF's original forecast was 3.7% to 4.2%. The revision reflects decelerating inflation, weaker-than-expected spending in the first quarter and updated retail sales numbers by the Census Bureau and the Bureau of Economic Analysis, according to NRF Chief Economist Jack Kleinhenz.
"Despite this revision, it is important to note that retail continues a long-term pattern of increased sales," the organization wrote in its latest monthly economic review. "Sales are still growing, albeit more slowly than expected."
Year-over-year, though, retail has grown every month since 2009, according to the NRF. Last month, the Bureau of Economic Analyst posted a 3% domestic product growth rate for the second quarter, in part thanks to consumer optimism.
"Consumer optimism supported by several months of solid employment are key ingredients supporting the increase in spending," the NRF wrote.
Retail's persistent growth is no small wonder, considering the massive number of store closures announced this year. Nearly 6,000 retail storefronts have shuttered in the U.S. so far in 2017, according to Fung Global Retail & Tech's store tracker. That's already 178% higher than the total closures last year. But a considerable number of new stores also sprang up this year: 3,300 to be exact, a 54% increase from 2016.
The lag in sales as well as the latest round of store closings can be largely attributed to the failure of traditional department stores. J.C. Penney Co. Inc. (JCP) , Macy's Inc. (M) , Kohl's Corp. (KSS) and Dillard's Inc. (DDS) all saw their stocks lose value after posting second quarter earnings.
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