NRF reports economy is “solid” despite slowing growth rate

According to the National Retail Federation’s (NRF) April Monthly Economic Review, consumer spending is a key factor in the ongoing recovery of the economy. Despite expectations for slower growth in GDP and retail sales, the economy is expected to continue performing well for the remainder of the year. The NRF’s Chief Economist, Jack Kleinhenz, expressed confidence in the foundation of the economy and stated that it should continue to grow in 2024, although not at an exceptional rate.

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%.

Kleinhenz noted that inflation has decreased significantly due to various factors such as 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.

Retail sales are projected to grow between 2.5% and 3.5% in 2024 which marks a slowdown from rapid growth seen during pandemic but aligns with pre-pandemic average of 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.

In summary, despite expectations for slower growth in GDP and retail sales,

By Sophia Gonzalez

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