We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Consumers hang on tight as economy is “rebalanced” by Federal Reserve

Consumers hang on tight as economy is “rebalanced” by Federal Reserve

NRF says “modest expansion” more likely than “extreme cooling off” as central bank fights inflation.

NRF Screen Shot 2022-06-02 at 12.48.16 PM.png
June 2, 2022
Supply Chain Quarterly Staff
No Comments

The Federal Reserve faces a tough inflation fight, but it is “unlikely” that effort will backfire into a major setback, thanks to a strong economy that continues to produce growth in employment, wages, and consumer spending, the National Retail Federation (NRF) said Wednesday.

“With changes underway that focus on taming inflation without splintering the economy, the nation’s economic system is in the process of being rebalanced in ways that are testing its resilience,” NRF Chief Economist Jack Kleinhenz said in a release. “This is an extraordinary period with unprecedented factors that include inflation at a 40-year high, uncertainty over the war in Ukraine, supply chain disruptions, and the Federal Reserve raising interest rates. There’s good reason why businesses, consumers, and policymakers alike all feel uneasy.”

The impact of those factors has already been seen in gross domestic product (GDP) trends, which are forecasted to climb just 2.6% this year and another 2.1% in 2023, according to the June issue of NRF’s Monthly Economic Review.

Those growth rates would be far below the GDP’s 5.7% jump in 2021, but the drop is mainly tied to drop tied to international trade balances, inventories, and government spending, the NRF said. In contrast, consumer spending was up a “solid” 3.1% year over year while business investment was up 9.2%, the report found.

“Though many people fear an extreme cooling off of the economy, there is not an overwhelming amount of evidence to support such predictions,” Kleinhenz said. “In general, the data suggests that we remain in an ongoing expansion.”

Other evidence for continue strength includes strong April retail sales numbers as consumers shrugged off rising inflation and stock market volatility. And the Employment Cost Index showed wages rising 5% in the first quarter of 2022 compared with the first quarter of 2021, which was not high enough to keep up with inflation but still the highest reading in nearly two decades, NRF said.

“The Fed has a tricky job on its hands,” Kleinhenz said. “Increased interest rates will mean higher borrowing costs across the economy at the same time higher prices keep eroding the purchasing power of the U.S. consumer. But the central bank needs to act in order to prevent inflation from being baked into the economy and to reduce the risk that expectations of inflation will become unanchored.”

Finance Strategy
KEYWORDS NRF - National Retail Federation
    • Related Articles

      Freight spending rose by double digits in Q3, buoyed by tight trucking market.

      Pelican BioThermal Celebrates 5 Year Anniversary of Credo on Reserve Rental Program

      NRF says U.S. economy will continue growth despite end of stimulus spending

    Recent Articles by Supply Chain Quarterly Staff

    Saddle Creek adds 1.8 million square feet of warehouse space in four markets

    Penske’s 3PL arm to expand brokerage capabilities with new offices in Chicago and NJ

    ERP vendor Aptean acquires TMS provider TOTALogistix

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Report: Sagging freight stats show that trucking sector is returning to its historic mean

    • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

    • Heavy transport across two continents

    • Survey: most Americans unaware that truckers face shortage of parking spaces

    • Supply chain executives not yet seeing expected results from technology investments

    Featured Video

    20221107korber large vs

    Enhancing Customer Experience with Your Supply Chain Strategy

    Viewer Contributed
    With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

    FEATURED WHITE PAPERS

    • Three layers of forklift safety: Promoting operating best practices

    • The Complete Guide to Automated Packaging

    • Five tips for parcel success in 2023

    • Guide to Pallet Rack Safety

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing