Forecast: Sales growth to slow next year
Morgan Stanley on Friday sharply cut its forecast for retail sales growth in 2008, saying U.S. consumer spending would be restricted by declining home values, tighter credit standards and more modest job growth.
Analyst Gregory Melich now expects retail sales to grow 3 percent in 2008, down from a previous forecast of 4.5 percent. That would mark the slowest annual growth in retail sales since 2003.
His forecast assumes that average home prices would fall about 6 percent from where they are now, leading to about $100 billion less in total consumer spending, half of which he predicts would come from traditional retail categories.