National Retail Federation Chief Economist Jack Kleinhenz said in the organization’s Monthly Economic Review the economy’s fast-paced growth could slow somewhat as the United States Federal Reserve boosts interest rates incrementally during the coming months to slow rising prices. However, he added consumers are likely to keep on shopping as lower inflation eases uncertainty.
Kleinhenz stated he believes inflation should slow in 2022 partly because year-over-year comparisons will be against elevated levels of 2021 spending. Also, he said, Fed and other governmental fiscal and monetary policies that have combined with ongoing pandemic-induced supply problems to drive inflation should tail off.
“The Fed’s tightening has kicked off a new cycle of adjustment and the outlook for interest rates has consequences for consumers and businesses alike,” Kleinhenz stated. “There is a growing list of uncertainties, and the risks are mounting. But underlying strength and momentum from both the consumer and business sectors are likely to offset a modest slowdown and should leave the economy bustling forward this year.”
In its annual outlook, NRF forecast a retail sales increase between 6% and 8% in 2022 to between $4.86 trillion and $4.95 trillion.
