U.S. Recession Unlikely

In the U.S., a recession is unlikely and the economy is expected to see slight growth in 2023 as consumers continue to cope with inflation and high interest rates, says Jack Kleinhenz, chief economist at the National Retail Federation (NRF). Following two consecutive quarters of negative numbers in the first half of the year, U.S. gross domestic product grew 3.2 per cent year-over-year in the third quarter. Growth slowed to 2.9 per cent in the fourth quarter, but the year still came in at 2.1 per cent above 2021 for the year. At the same time, consumer spending grew 2.8 per cent for the year. Spending slowed in late 2022, dropping 0.2 per cent month over month in November and another 0.3 per cent in December. Retail sales as defined by NRF – excluding auto dealers, gas stations, and restaurants to focus on core retail – were down 0.5 per cent month over month in December. Combined November-December holiday sales were up 5.3 per cent over 2021, but were slower than expected.