NRF reports economy is “solid” despite slowing growth rate

Economic Growth and Retail Sales Forecast for 2024: Foundation Strong, Consumer Spending to Remain Key Factor

The National Retail Federation’s Chief Economist, Jack Kleinhenz, stated that despite expectations for slower growth in GDP and retail sales, the economy is expected to continue performing well for the remainder of the year. Kleinhenz expressed confidence in the economy’s foundation, mentioning that consumer spending is a key factor in the ongoing recovery. He noted that the economy should continue to grow in 2024, although not at an exceptional rate.

According to the NRF’s April Monthly Economic Review, retail sales are projected to grow between 2.5% and 3.5% in 2024. While this marks a slowdown from the rapid growth seen during the pandemic, it aligns with the pre-pandemic 10-year average of 3.6%. Overall economic growth is expected to be modest, but consumer spending should remain strong, supported by slowing inflation and positive job growth.

GDP, adjusted for inflation, is forecasted to grow around 2.3% year over year in 2024. This rate is slightly slower than the previous year’s growth of 2.5%, but it is still considered robust enough to sustain job growth and consumer spending. Consumer spending is expected to increase by about 2%, a slight decrease from the previous year’s 2.3%.

The NRF noted that inflation has decreased significantly due to various factors, including moderating wage growth, supply chain improvements, and higher interest rates. Despite a slight uptick in prices at the beginning of 2024, Kleinhenz anticipates inflation easing down to 2.2% year over year by the end of the year. As a result, interest rates are expected to decrease, with Kleinhenz predicting rate cuts by the Federal Reserve in June, September

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