WASHINGTON, DC - Economic growth withstood inflation, high interest rates, and other challenges in 2024 and should continue to show strength in 2025, National Retail Federation Chief Economist Jack Kleinhenz said today.

“The U.S. economy ended 2024 on a high note, and the outlook looks promising for 2025,” Kleinhenz said. “Recent performance shows the economy is on solid footing and has been growing at a steady pace and above its historical average. The labor market is healthy, unemployment is low, inflation has fallen almost to the Federal Reserve’s target even though it remains somewhat sticky, and the direction of interest rates remains lower.”

“I don’t want to get ahead of our annual forecast, but there is good reason to expect healthy economic growth in 2025 even though its shape will depend upon a lot of moving parts,” Kleinhenz said. Key factors could include changes to trade, immigration, regulation, tax and spending policies and their impact on economic activity “but the resilience of the U.S. consumer should hopefully remain part of the dominant narrative.”

Kleinhenz’s comments came in the January edition of NRF’s Monthly Economic Review, which said 2024 gross domestic product was on track to grow 2.7 percent over 2023, based on results for the first three quarters and data from the first two months of the fourth quarter. GDP is expected to grow between 2 percent and 2.5 percent in 2025, although “the range of uncertainty is wide and this estimate could change.”

The past year “was marked in large measure by the impressive resiliency of the consumer and a sturdy labor market,” with consumer spending supported by low unemployment and wage gains that outpaced inflation even as employers slowed hiring, Kleinhenz said.

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