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Sagging sales likely to persist
By MARK ALBRIGHT
Published January 17, 2007
NEW YORK - Weaker-than-forecast holiday retail sales are expected to linger for the next six months. That's the forecast from the National Retail Federation, which expects general merchandise sales to increase only a lackluster 3.8 percent during the first quarter and 4.4 percent for all of 2007. That's lower than the 6.3 percent sales gain for all of 2006, which was dragged down by a 4.4 percent gain in the last two months of the holiday season. Blame the housing slump, which lowered the sales of home furnishings and building materials and undercut homeowners' ability to tap into the rising value of their home to bankroll other spending. While some economists say the housing market has stabilized, the retail federation has yet to buy into it. "I'm skeptical that we have seen the bottom," said Rosalind Wells, chief economist for the retail group. "Retail sales typically lag behind housing for several months, " said Mike Niemira, chief economist for the International Council of Shopping Centers. While the U.S. Commerce Department reported strong retail sales for December, that was driven by higher gas prices at the pump and auto sales. The federation tracks only general merchandise such as apparel and home furnishings.
[Last modified January 17, 2007, 00:09:41]
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