According to the National Retail Federation’s 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 economy’s foundation and projected that retail sales will grow between 2.5% and 3.5% in 2024.
Kleinhenz also 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 still strong enough to sustain job growth and consumer spending. GDP adjusted for inflation is forecasted to grow around 2.3% year over year in 2024, which 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.
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%. The NRF noted that despite expectations for slower growth in GDP and retail sales, consumers should continue spending more as they feel more comfortable about their financial situation.
In conclusion, while there may be some concerns about slower economic growth in 2024 compared to previous years
