The U.S. economy remains on steady ground despite growing concerns over new tariffs and evolving federal policies, according to National Retail Federation (NRF) Chief Economist Jack Kleinhenz. In NRF’s July Monthly Economic Review, Kleinhenz highlighted strong consumer and business spending but emphasized that “anxiety and confusion” tied to trade policy, immigration, and regulation are creating uncertainty for retailers and the broader economy.
While gross domestic product (GDP) fell slightly in the first quarter due to a spike in imports ahead of tariff announcements, private sector spending continues to show resilience. Core retail sales, excluding autos, gas, and restaurants, rose 3.9% year over year through May. Personal income and consumer spending also posted solid 4.5% gains in May, with inflation edging up modestly to 2.3%.
The labor market remains stable, adding 147,000 jobs in June with job openings exceeding the number of unemployed. However, Kleinhenz cautioned that sustained tariff increases could eventually drive up consumer prices and impact job growth.
