Near-Term Consumer Outlook 'Favorable;' 2023 'Touch and Go': NRF
The consumer outlook over the next few months “remains favorable,” said National Retail Federation Chief Economist Jack Kleinhenz Thursday, but a “one in three” chance of a recession will make 2023 “touch and go.” Though the U.S. economy’s growth is…
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slowing, consumers are “financially healthy and the nation is unlikely to enter into a recession” for the rest of this year, but "a contracting economy short of a recession is not out of the question,” he said. Employment gains, rising wages and more hours worked will support household spending, Kleinhenz said: “Policy issues will likely be the deciding factor shaping the economic outlook this year and next.” Retail sales excluding cars, gas stations and restaurants were expected to drop in May but fell just 0.3% from April and grew 6.7% year on year (see 2206150025), he noted; sales were up 7.3% for the first five months of the year. Overall household spending is expected to rise 9% next year, said the economist. “As COVID-19 eases, consumers are rebalancing their spending and adjusting shopping habits,” Kleinhenz said, noting spending on restaurants, recreation and transportation are “on the upswing” at 17.5% year on year in May.