Economic Recovery Expected to Continue Despite Slower GDP Growth and Retail Sales: NRF Chief Economist Emphasizes Consumer Spending as Key Driver

NRF: Despite Slowing Growth Rate, Economy Remains Strong

The National Retail Federation (NRF) has forecasted that despite predictions for slower growth in gross domestic product (GDP) and retail sales, the economy is expected to perform well for the rest of the year. NRF Chief Economist Jack Kleinhenz emphasized that the foundation of the economy is strong and on a sustainable path, with consumer spending being a key driver of ongoing recovery.

In its April Monthly Economic Review, the NRF projected that retail sales would grow between 2.5% and 3.5% in 2024, indicating a gradual slowdown compared to rapid growth during the pandemic. This aligns with the 10-year pre-pandemic average of 3.6%. While overall economic growth is predicted to be modest, consumer spending is expected to remain strong as inflation eases and job growth stays positive despite rising unemployment rates.

GDP is projected to grow by about 2.3% year-over-year when adjusted for inflation, a slower rate than last year’s 2.5% but still sufficient to support job growth and consumer spending. Consumer spending is expected to increase by around 2%, down slightly from last year’s 2.3%. Kleinhenz highlighted the connection between consumers’ financial health and spending power, noting that the consumer sector currently looks promising as the economy experiences resilient expansion heading toward its fifth year.

The NRF also noted a meaningful decrease in inflation, attributed to factors such as moderated wage growth, a more stable supply chain, lower consumer demand, and increased interest rates. While inflation slightly increased at the beginning of 2024, Kleinhenz anticipates a steady decline, with inflation reaching 2.2% year-over-year by year-end

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