A recession in the USA is unlikely and the economy is expected to see slight growth in 2023 as consumers continue to cope with inflation and high interest rates, National Retail Federation (NRF) Chief Economist Jack Kleinhenz said.<\/p>\n
\u201cA month into 2023, the economy is facing stiff headwinds and \u2013 with the exception of easing inflation \u2013 will likely face more challenges before it gets better,\u201d Kleinhenz said. \u201cThe debate on whether we are in a recession will heighten over the next few months, just like last year. But while households will probably feel recession-like conditions this year, I do not expect that the downturn will be severe enough to become an official recession.\u201d<\/p>\n
\u201cThe good news is that corporate and household balance sheets are in the best shape we\u2019ve seen going into a downturn,\u201d Kleinhenz said. \u201cThis should make any economic slowdown mild and limit the downside risks despite my outlook for the economy to staddle a zero-growth path during 2023.\u201d<\/p>\n
Kleinhenz\u2019s remarks came in the February issue of NRF\u2019s Monthly Economic Review<\/em>, which said the economy is \u201cmore resilient than expected\u201d but nonetheless showing a mild slowdown as Federal Reserve interest rate hikes adopted to bring inflation under control \u201care having their desired effect.\u201d<\/p>\n Following two consecutive quarters of negative numbers in the first half of the year \u2013 a common but unofficial definition of a recession \u2013 gross domestic product grew 3.2% year-over-year in the third quarter. Growth slowed to 2.9% in the fourth quarter, but the year still came in at 2.1% above 2021. The National Bureau of Economic Research declined to declare an official recession because the decline in the first half of the year affected only certain sectors of the economy rather than meeting its definition of a recession being a significant decline seen across the economy.<\/p>\n While consumer spending grew 2.8% for the year, it was slowing in late 2022, dropping 0.2% month over month in November and another 0.3% in December. Overall retail sales dropped 1.1% monthly in December as gasoline prices and automobile sales fell sharply and holiday sales turned out to be choppy. Retail sales as defined by NRF \u2013 excluding auto dealers, gas stations and restaurants to focus on core retail \u2013 were down 0.5% month over month in December. Combined November-December holiday sales were up 5.3% over 2021 but were slower than expected.<\/p>\n Whether the economy will see a \u201csluggish pace of growth\u201d or slips into a \u201cconsiderable falloff\u201d depends largely on whether the Fed can strike the right balance between interest rates and inflation, Kleinhenz said.<\/p>\n While the slowing momentum of inflation could pave the way for reassessment of future rate hikes or even a reduction in rates, rates will likely remain \u201cin restrictive territory\u201d for the remainder of the year, he said.<\/p>\n","protected":false},"excerpt":{"rendered":" A recession in the USA is unlikely and the economy is expected to see slight growth in 2023 as consumers continue to cope with inflation and high interest rates, National Retail Federation (NRF) Chief Economist Jack Kleinhenz said. \u201cA month into 2023, the economy is facing stiff headwinds and \u2013 with the exception of easing…<\/p>\n","protected":false},"author":1,"featured_media":19684,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83],"tags":[],"thb-sponsors":[],"class_list":["post-19683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bulletin"],"acf":[],"yoast_head":"\n