NRF reports economy is “solid” despite slowing growth rate

The National Retail Federation’s Chief Economist, Jack Kleinhenz, expressed confidence in the economy’s foundation and its ongoing recovery despite expectations for slower growth in GDP and retail sales. According to the NRF’s April Monthly Economic Review, retail sales are projected to grow between 2.5% and 3.5% in 2024, which marks a slight slowdown from the rapid growth seen during the pandemic but aligns with the pre-pandemic 10-year average of 3.6%.

GDP, adjusted for inflation, is forecasted to grow around 2.3% year over year in 2024, slightly slower than the previous year’s growth of 2.5%, but 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%.

Kleinhenz 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, and December of this year.

Overall economic growth is expected to be modest but supported by strong consumer spending, which should remain strong despite expectations for slower growth in GDP and retail sales.

By Samantha Johnson

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