Business Conditions 'Generally Positive,' Despite Inflation: NRF
Business conditions are “generally positive as consumer fundamentals continue to support economic activity,” said National Retail Federation Chief Economist Jack Kleinhenz Friday, after the trade group’s Thursday holiday season sales growth forecast of 6%-8% (see 2211030060). Kleinhenz noted gross domestic…
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product rose 2.6% in Q3, calling it a “healthy increase that should override any remaining fears that the economy is in a recession.” Consumers’ willingness to spend has been “clearly impacted by inflation,” Kleinhenz said, but job growth, rising wages and available savings accumulated during the pandemic have bolstered their ability to spend. September consumer spending rose 0.6% from August, underscoring that “demand remains strong and can be expected to continue,” he said. The labor market “has cooled but job growth remains strong,” said the economist, saying employers “will likely continue to hire in the next few months.” Wages and salaries are up about 5% year over year, he said, citing Bureau of Labor Statistics data, and consumers have about $1.7 trillion in savings built up during the recession. Credit balances “are growing but remain near a historical low as a percentage of disposable income,” he said. NRF forecasts holiday retail sales Nov. 1-Dec. 31 will be $942.6 billion-$960.4 billion.