Kiplinger's latest forecast on retail sales and consumer spending iStockphoto By David Payne, Staff Economist August 16, 2017 GDP Unemployment Interest Rates Inflation Business Spending Energy Housing Retail Sales Trade Deficit GDP 2.1% pace in '17, 2.4% in '18 More » Jobs Hiring pace should slow to 175K/month by end '17 More » Interest rates 10-year T-notes at 2.4% by end '17 More » Inflation 1.4% in '17, down from 2.1% in '16 More » Business spending Rising 3%-4% in '17, after flat '16 More » Energy Crude trading from $40 to $45 per barrel in December More » Housing Existing-home sales up 3.5% in '17 More » Retail sales Growing 3.5% in '17 (excluding gas) More » Trade deficit Widening 4% in '17, after nearly flat '16 More » Retail sales for the year suddenly look better after a strong gain in July and upward revisions to May and June. Sales excluding gasoline in 2017 are likely to rise by 4.0%, up a bit from its 3.8% pace in 2016. And given very modest price growth, inflation-adjusted sales are actually doing pretty well, which is a good sign for GDP growth in the second half of the year.An encouraging sign is that July was a good month for in-store sales after weakness in May and June. Department store sales have surprisingly managed to stay steady for the past nine months, marking the first time that the relentless eleven-year downtrend has been arrested. Although the respite is only temporary, a slowdown in the otherwise ceaseless decline would relieve some of the pressure on this sector to speed up store closures. via e-mail: Kiplinger Alerts — Intelligence for your business success E-commerce sales will grow 14% this year, slightly less than the 15% gain in 2016. E-commerce has shown remarkably solid growth over the past seven years, and will account for 9% of all retail sales (13% of all goods sales) by the end of this year. In-store sales will show only modest 1.8% growth, though this is a slight pickup from last year’s 1.4% gain. Advertisement Building materials sales appear to be back on track after a puzzling slowdown earlier this year. They should have a strong year, mirroring the strength in housing construction in general. They are expected to grow 7.3% in 2017, up from 5.8% in 2016. Restaurant sales are slowing to a more sustainable growth pace this year: 3.3%, down from 5.5% in 2016. Labor shortages will make expansion difficult for some chains, and higher minimum wage laws will boost menu prices. Plus, sales grew strongly for six years straight and are due for a breather. SEE ALSO: 6 Retailers That Can Stand Up to Amazon Source: Department of Energy, Price Statistics Show comments