US retail sales are set to grow at a slower pace this year amid heavy inflation and a cooling job market, the National Retail Federation (NRF) forecast.
The organization expects total sales to rise 2.5% to 3.5% to between $5.23 trillion and $5.28 trillion for the year, the NRF said Wednesday. That compares with an increase of 3.6% to $5.1 trillion in 2023.
“The economy is primarily supported by consumers who have shown much greater resilience than expected, and it’s hard to be bearish on the consumer,” said NRF chief economist Jack Kleinhenz. “The question for 2024 ultimately is, will consumer spending maintain its resilience?”
Meanwhile, the number of online purchases is predicted to climb 7% to 9% to reach $1.47 trillion to $1.5 trillion, up from $1.38 trillion a year ago.
While the NRF expects inflation to moderate during the year as the economy slows, the booming job market seen in 2023 will weaken this year, resulting in approximately 100,000 fewer jobs on average per month, the NRF explained.
Additionally, while rising home and stock prices are expected to continue into 2024, many consumers are “feeling a pinch from tighter credit and inflation,” Kleinhenz added.
However, NRF still believes consumers are going into 2024 with a positive outlook.
“The resiliency of consumers continues to power the American economy, and we are confident there will be moderate but steady growth through the end of the year,” said NRF CEO Matthew Shay.
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Main image: Women shopping. (Shutterstock)
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