The National Retail Federation (NRF) released it latest update on the state of the U.S. economy and how it is currently affecting retail sales.
According to NRF Chief Economist, Jack Kleinhenz, the U.S. economy is still growing, but not as fast as it was earlier this year:
- The GDP growth rate was revised down from 2.4% to 2.1% for the second quarter of 2021.
- The unemployment rate increased to 3.8% in August as more people entered the labor market looking for jobs.
- Personal spending increased by 0.8% in July, but consumers are digging into their savings to support their spending.
- Consumer confidence declined in August as high prices and interest rates weighed on shoppers’ decisions.
- Retail sales rose by 3.8% year over year in July, boosted by Amazon’s Prime Day and other special events.
- Spending on services, which has been growing since the pandemic restrictions ended, slowed down from 3% to 1.6% in the second quarter of 2021.
NRF forecasted that 2023 retail sales would increase 4% – 6% over 2022, but there is a good chance that sales will end up in the lower range of the forecast (if not lower) due to the Fed’s interest rate increases.
