Did You Know Consumers Are Expected to Keep Spending?

While economists – both professional and armchair – debate the state of the economy, the future of interest rates and whatever else they can pontificate on, consumers are doing what they do best – consume.

The National Retail Federation recently released its 2024 forecast saying retail sales will increase this year between 2.5% and 3.5% to between $5.23 trillion and $5.28 trillion.

“The resiliency of consumers continues to power the American economy, and we are confident there will be moderate but steady growth through the end of the year,” NRF President and CEO Matthew Shay said, in a media release. “Successful retailers offer consumers products and services when, where and how they want to shop with prices they want to pay.”

The 2024 sales forecast compares with 3.6% annual sales growth of $5.1 trillion in 2023. The 2024 forecast is in line with the 10-year pre-pandemic average annual sales growth of 3.6%, according to the release.

The retail association also projects full-year GDP growth of around 2.3%, a slower speed than the 2.5% in 2023 but strong enough to sustain job growth, the release states. Inflation prices are also expected to moderate to 2.2% on a year-over-year basis, due to a cooling economy, the labor and product market coming into better balance and retreating housing costs.

“The economy is primarily supported by consumers who have shown much greater resilience than expected, and it’s hard to be bearish on the consumer,” NRF Chief Economist Jack Kleinhenz said in the release.