Forecasts for the economy remain positive as economic expansion continues post COVID-19. A new report, from the National Retail Federation (NRF), points to a five-year resurgence in economic growth following the end of the COVID-19 recession in 2020. 

National Retail Federation chief economist, Jack Kleinhenz, said slower growth of gross domestic product and retail sales has not damped the overall retail market, which is expected to continue to see positive results through the remainder of 2024.

“No one can accurately forecast what surprises the next year might hold, but the foundation of the economy is relatively sturdy and still on a sustainable path,” Kleinhenz said, adding that the continuing recovery remains “highly reliant” on consumer spending. “Barring unexpected shocks, it should continue growing in 2024, although not spectacularly. No one could have imagined when the COVID-19 recession ended in April 2020 that we would have experienced such a resilient expansion that is now headed toward its fifth year.”

Kleinhenz’s positive outlook comes on the heels of the release of the April NRF Monthly Economic Review. The NRF is predicting sales growth will return to between 2.5 percent and 3.5 percent in 2023. The federation is also predicting a slowdown in the pace of growth seen post-pandemic to a 10-year average of 3.6 percent. 

The GDP (gross domestic product) is expected to rise 2.3 percent year over year, adjusted for inflation. This is a slight decrease from 2023, when inflation reached 2.5 percent.

Consumer spending is predicted to continue to improve as inflation slows, with job growth also remaining positive, despite an increase in unemployment reaching 2.3 percent, up 2 percent from 2023. 

“Consumers’ behavior and spending power are tied to their financial health, and the consumer sector looks good at the moment,” Kleinhenz said.

Wage growth should slow slightly, sitting at around 3.5 percent, with 100,000 fewer jobs predicted each month. 

Overall disposable income is up 4.1 percent, pushing stocks and home prices up and bolstering household wealth by 8 percent. The combination of wage growth moderation and improved supply chains will weaken consumer demand and slow inflation to 2.2 percent year over year. 

The NRF predicts interest rates will hold steady into June, when rates are expected to be slashed with further reductions expected in September and December, reducing overall rates by three-quarters of a percent by the end of the year.