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Oct 6, 2023

US economy still shows resilience, says NRF economist

The US economy is exhibiting continuous growth despite labor disputes, uncertainty created by Congress, and ongoing challenges around high inflation and interest rates, according to Jack Kleinhenz, chief economist of National Retail Federation (NRF), as his comments came in the October issue of the NRF’s Monthly Economic Review. 

 

“New turbulence from the expanding autoworkers strike and the threat of a government shutdown – which could still happen after Congress’ short-term funding measure expires – have added to the existing headwinds already facing the economy,” Kleinhenz said. “Nonetheless, the economy continues to chug along and defy recession predictions, proving it to be more resilient than anticipated.” 

 

Data shows the gross domestic product reported by the Bureau of Economic Analysis for the second quarter increased by 2.1%. Consumer spending increased as well although only 1.8% year over year adjusted for inflation. Incoming data suggests the third quarter was largely on par with the second quarter, and 2023 could end with a “soft landing” rather than a recession. 

 

“Weaker growth as mirrored in the GDP revisions suggests that higher interest rates and tighter lending standards are working more thoroughly than previously recognized,” said Kleinhenz. “Since higher interest rates typically slow down the economy, the Federal Reserve is most likely pleased to see that higher rates are having an impact on employment, economic output and corporate results.” 

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