WASHINGTON, DC - Despite slow growth, the National Retail Federation (NRF) recently announced that the United States economy did better in the first half of the year than was anticipated in the July issue of its Monthly Economic Review.

“The first half of the year is over, and the economy is still moving in the right direction. While its rhythm, tone, and pattern have slowed, it has not stalled, and recently revised data shows underlying strength that seems to be rolling forward,” said Jack Kleinhenz, Chief Economist. “The resiliency of the U.S. consumer will be tested in the coming months as economic headwinds are likely to impair spending.”

As Kleinhenz explains, $500 billion in excess savings built up during the pandemic and continued employment growth mean that consumers are on the path of least resistance to economic growth and are doing their part to keep the economy pushing forward.

According to a release, data shows that the first-quarter gross domestic product (GDP) adjusted for inflation grew 2 percent year over year rather than the 1.1 percent first reported. The personal savings rate has been revised to 4.3 percent from 3.4 percent, and private final sales to domestic purchasers were revised to 3.2 percent growth from 2.9 percent.

Revised data from the Federal Bureau of Economic Analysis now shows that consumer spending—which makes up 70 percent of GDP—increased at an annual rate of 4.2 percent in the first quarter, which was four times the 1 percent growth in the fourth quarter of 2022 and the fastest growth since mid-2021 despite strong headwinds from interest rates and inflation.

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As we head into the second half of 2023, AndNowUKnow will share more updates on consumer spending and economic developments affecting the industry.

National Retail Federation