U.S. Consumers Spending Despite Worries

U.S. consumers remain worried about high inflation and Federal Reserve interest rate hikes intended to bring inflation under control, but neither has stopped them from spending, says Jack Kleinhenz, chief economist at the National Retail Federation (NRF). “The economic situation in the U.S. is unsettling. Consumer confidence is down, consumer spending’s rate of growth has slowed, and economists and consumers alike are worried about the possibility of a recession, all reflecting persistently high inflation and rising interest rates. Nonetheless, spending continues to grow and many economists say a recession – if there is one – will likely be mild.” NRF’s most recent ‘Monthly Economic Review’ says that consumer spending held up better than expected in August as overall retail sales grew 0.3 per cent from July and 9.1 per cent year over year. Year-over-year increases in retail sales have been mostly in the upper single digits since spring, not as dramatic as the double-digit numbers seen most of last year into early 2022, but still healthy.