Retail economists are “guardedly optimistic” for continued economic strength in 2024, after resilient consumer spending kept the U.S. economy on its feet in 2023 despite a host of inconsistencies and uncertainties, speakers said today at the National Retail Federation (NRF)’s annual show in New York.
NRF Chief Economist Jack Kleinhenz said he does not believe the nation will trip into a recession in the coming year, flying in the face of recent hurdles like regional bank failures, the Federal Reserve raising interest rates to fight inflation, and flareups of geopolitical violence.
Factors that kept markets stable despite that turbulence included a “very strong” labor market as measured by 2.7 million new jobs created, simultaneous wage and income growth, and a surprisingly slow post-pandemic shift in tipping spending from goods to services, he said in a panel called “Prospects and Perspectives for the U.S. Economy.”
Additional numbers that supported that conclusion were greater gross domestic product (GDP) growth in 2023 than 2022, and a sharp drop in inflation shown by a shift in consumer product index (CPI) growth from 9.1% in June to just 3.4% in December, said panelist Ken Kim, a senior economist with KPMG.
Historic records show that the U.S. has hit recession territory each time such a steep inflation drop has happened in the past, but that record will probably stop now. “We think a soft landing is achievable for 2024 and we will not get a recession in the U.S.,” Kim said.
