After a year of challenges, the U.S. economy has proven to be healthy even as it continues to slow, National Retail Federation (NRF) Chief Economist Jack Kleinhenz said.
“The U.S. economy is on track to end 2023 with vigorous growth for the year,” Kleinhenz said. “A strong labour market, rising wages and access to excess savings have helped spending continue despite inflation and higher interest rates.”
Kleinhenz’s comments came in the December issue of NRF’s Monthly Economic Review, which said gross domestic product growth for the year is now expected to come in at 2.5% adjusted for inflation over 2022, “much higher than expected a year ago.”
GDP grew at an annualised pace of 3.2% over the first three quarters and shot up 5.2% in the third quarter but is expected to slow to 1.2% in the fourth, according to the Federal Reserve Bank of Atlanta’s GDPNow model.
Gross domestic income – which goes beyond the value of products produced to include wages, rent, interest and corporate profits earned during production – was up only 1.5% in the third quarter, also adjusted for inflation, following 0.5% in the second quarter.
It was the fourth consecutive quarter in which GDI grew less than GDP, which Kleinhenz said “adds to the argument that the economy is slowing” even though neither indicates that growth has halted.