Surveys

A Recession Is Unlikely, Says NRF Economist

SurveysJul 06, 2022

A Recession Is Unlikely, Says NRF Economist

The economy is moving from “extremely strong” to “moderate” growth, said NRF Chief Economist Jack Kleinhenz.

2021_Shopping Cart.jpg
National Retail Federation Chief Economist Jack Kleinhenz shared his thoughts on a possible recession in the organization’s most recent monthly economic review.
New York— The U.S. economy is unlikely to sink into a recession this year, according to National Retail Federation Chief Economist Jack Kleinhenz.

The organization’s head economist gave an overview of the current economic situation, as well as his predictions for the next few years ahead, in the NRF’s latest Monthly Economic Review.

The United States is facing its highest inflation rates in 40 years, he noted, prompting the Federal Reserve to raise the benchmark federal funds interest rate by three-quarters of a percentage point, the largest increase since 1994.

To fight inflation, Kleinhenz explained, the Fed has to slow demand, and to do that, it has to be more expensive for consumers and businesses to borrow money.

“The Fed increases will mean higher interest rates and higher monthly payments on home mortgages, car loans and credit card bills for consumers while businesses will see higher costs for corporate borrowing and the government will pay more on the $23.9 trillion in debt held by the public,” he wrote.

The Fed’s latest forecast pegs the benchmark federal funds rate at 3.4 percent by the end of 2022 and 3.8 percent by the end of 2023.

Raising the interest rate, he said, weighs down stock and bond returns and impacts consumer confidence.

The Federal Reserve Bank of New York’s Survey of Consumer Expectations said households expect inflation to rise 7 percent over the next year, but only 4 percent over the next three years.

To add to the situation, the war in Ukraine has not only led to geopolitical strife but also driven up energy prices and exacerbated supply chain issues.

Yet, despite these myriad economic and political issues, economic data is still signaling solid growth ahead, Kleinhenz said.

Consumer spending has remained resilient in the face of inflation.

The NRF calculates retail spending, narrowing in on core retail by excluding automobile dealers, gas stations and restaurants.

Its data shows retail spending in May was unchanged month-over-month and up nearly 7 percent year-over-year.

For the first five months of 2022, retail sales were up more than 7 percent compared with the same period in 2021.

 Related stories will be right here … 

As COVID-19 restrictions ease, households are expected to adjust their spending and shopping habits, said Kleinhenz.

Overall household spending, other than retail sales, is expected to climb 9 percent to a new high next year.

Spending on services and travel is also expected to rise.

Restaurant sales, which Kleinhenz said act as a proxy for broader services, posted month-over-month growth of nearly 1 percent and year-over-year growth of 18 percent in May.

The Transportation Security Administration is shuffling an increased number of travelers through security, with passenger volume close to pre-pandemic levels.

More than 40.3 million travelers passed through airport checkpoints between June 1 and June 17, only 13 percent below the same period in 2019.

Manufacturing activity also rose in May, Kleinhenz noted.

Supplier deliveries improved alongside “decent” demand and orders, while order backlogs grew at a faster pace, according to the monthly report on business from the Institute for Supply Management.

The job market also remained steady.

“None of us can say with any assurance what the future holds, but policy actions will likely be the deciding factor shaping the economic outlook this year and next.”—NRF Chief Economist Jack Kleinhenz

“Job openings and quit rates through the end of April suggest the job market remains tight, payroll growth remains sturdy even though it slowed in May, and the unemployment rate has been steady at 3.6 percent for three months in a row,” said Kleinhenz.

The current period of economic expansion is more than two years old, he said, meaning it has lasted longer than the two-month recession that ended in April 2020.

“I am not betting on an official recession in the near term, but the most recent research pegs the risk over the next year at about one in three and it will be touch and go in 2023,”said Kleinhenz.

While he does not believe a recession necessarily is coming, a contracting economy is still possible.

The consumer outlook over the next few months is favorable, he said, as most U.S. households continue to have high levels of purchasing power.

“The economy is moving away from extremely strong growth toward moderate growth, but increased income from employment gains, rising wages and more hours worked is expected to support household spending,” he said.

A recent report from Fruchtman Marketing forecasts 2022 jewelry sales will take a similar path of moderate growth compared with the period of strong growth last year.

“None of us can see around corners or say with any assurance what the future holds, but policy actions will likely be the deciding factor shaping the economic outlook this year and next,” Kleinhenz said.

To read the full economic review for July, visit the NRF website.

The Latest

Saks on Amazon flagship window
MajorsMay 16, 2025
Saks Fifth Avenue, Amazon Partner on Luxury Online Storefront

Plus, parent company Saks Global announces plans to cut ties with up to 600 vendors.

Graphic for My Next Question webinar with guest Peter Smith
Recorded WebinarsMay 16, 2025
Watch: Physical Retail Is Not Dead

Peter Smith joined Michelle Graff to chat about the state of brick-and-mortar stores and share a few book and podcast recommendations.

Tejen Candy Bowl Torque Necklace
CollectionsMay 16, 2025
Piece of the Week: Tejen’s ‘Candy Bowl’ Torque Necklace

The necklace features a candy-colored Australian white opal in 18-karat Fairmined gold, as the brand was named a Fairmined ambassador.

antique_Vegas_2024_by_headshot_stories_9454.jpg
Brought to you by
Las Vegas Antique Jewelry & Watch Show: Showcasing the Most Collectible Merchandise from Across the Globe

Gain access to the most exclusive and coveted antique pieces from trusted dealers during Las Vegas Jewelry Week.

1 Camilla Dietz Bergeron.jpg
Supplier BulletinMay 15, 2025
Treasure Hunting at the Las Vegas Antique Jewelry and Watch Show

Sponsored by the Las Vegas Antique Jewelry and Watch Show

Weekly QuizMay 15, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
The Mediterranean Blue diamond
AuctionsMay 15, 2025
'The Mediterranean Blue' Diamond Sells for $21M at Sotheby’s

A private American collector purchased the 10-carat fancy vivid blue diamond.

Jessica McCormack Fruit Salad Campaign Imagery
CollectionsMay 15, 2025
Jessica McCormack’s ‘Fruit Salad’ Collection Is Fresh for Summer

The designer has taken the appeal of freshly picked fruit and channeled it into a capsule collection of earrings, necklaces, and pendants.

Supplier Spotlight -Recorded-Webinar.png
Brought to you by
Watch: The Winston Red: GIA Examines the Smithsonian’s Newest Addition

Supplier Spotlight Sponsored by GIA

Stock image of diamonds
SourcingMay 15, 2025
Tariffs Take Toll on India’s Gem and Jewelry Industry in April

The country’s gem and jewelry exports fell 5 percent year-over-year last month, while imports declined 18 percent.

Disability advocate Catarina Rivera, JVC ADA compliance guide, circle of hands wearing jewelry
Policies & IssuesMay 15, 2025
State of Retail: How to Better Serve Customers With Disabilities

Around 54 million Americans and counting live with a disability. Here’s how to make your jewelry store and website more accessible.

Sekou Andrews
Events & AwardsMay 15, 2025
Poet Sekou Andrews to Give Closing Keynote at Converge

The event is also accepting poster submissions now through June 16.

Pope Francis
Policies & IssuesMay 14, 2025
Here’s What Happened to Pope Francis’ Ring

Before Pope Leo XIV was elected, a centuries-old procedure regarding the late pontiff’s ring was followed.

1998 Cosmograph Daytona, Ref.16516 Rolex
AuctionsMay 14, 2025
Custom Rolex Pulled From Sotheby’s Sale

The one-of-a-kind platinum Rolex Cosmograph Daytona was estimated to fetch up to $1.7 million.

Jeweler Constance Polamalu at Bloomstone, a store that specializes in lab-grown diamonds
Lab-GrownMay 14, 2025
State of Diamonds: What’s Next for Lab-Grown Diamonds?

While the product has entrenched itself in the market, retailers and consultants are assessing the next phase of the category’s development.

Surveillance footage Tiffany & Co. Seattle robbery
CrimeMay 14, 2025
Seattle Detectives Seek Public’s Help in Tiffany & Co. Robberies

The police are trying to identify the man suspected of robbing two Tiffany & Co. locations in the area.

Jeff Corey, new chairperson of the board for the Jewelers Board of Trade
MajorsMay 14, 2025
Jeff Corey Elected Chair of JBT Board

The well-known Maine jeweler takes over for Brian Fleming and will serve a one-year term.

Foundrae Ingot Pendant
Policies & IssuesMay 14, 2025
Foundrae Donates $11K to Ethical Metalsmiths

The donation was the result of the brand’s annual Earth Day Ingot event.

Eiseman Jewels ribbon cutting ceremony
IndependentsMay 13, 2025
Eiseman Jewels’ Renovated Dallas Store Is Bigger and Better

Located in NorthPark Center, the revamped store is nearly 2,000 square feet larger and includes the first Tudor boutique in Dallas.

Diamond Council of America
MajorsMay 13, 2025
DCA Announces New Learning Platform, Course Updates

The nonprofit has made updates to the content in its beginner and advanced jewelry sales courses.

Malyia McNaughton and Elyssa Jenkins-Pérez
MajorsMay 13, 2025
BIJC Launches New Education Fund

BIJC President Malyia McNaughton will shift roles to lead the new foundation, and Elyssa Jenkins-Pérez will succeed her as president.

Harwell Godfrey Snake Giza Ring, Foundrae Mind, Body Soul Story Necklace, Tiffany & Co. Tiffany Titan By Pharrell Williams Bracelet
TrendsMay 13, 2025
State of Jewelry Design: The Top 10 Jewelry Trends of the Past Decade

As a nod to the theme of JCK Las Vegas 2025, “Decades,” National Jeweler took a look back at the top 10 jewelry trends of the past 10 years.

Lightbox’s Reminiscence Poet earrings in 14-karat white gold with lab-grown diamonds
Lab-GrownMay 12, 2025
Lightbox to Go Dark by Summer, De Beers Says

The company plans to halt all consumer-facing activity this summer, while Lightbox factory operations will cease by the end of the year.

Stock image of shipping containers
Policies & IssuesMay 12, 2025
Tariffs on Chinese Imports Temporarily Slashed as U.S.-China Reach Deal

Following weekend negotiations, the tax on Chinese goods imported into the United States will drop by 115 percent for the next 90 days.

Artists’ Jewelry: From Cubism to Pop, the Diane Venet Collection
Events & AwardsMay 12, 2025
Jewelry By Picasso, Dalí on Display at Florida Art Museum

“Artists’ Jewelry: From Cubism to Pop, the Diane Venet Collection” is on view at the Norton Museum of Art through October.

2025 CASE Award Submission Graphic
Events & AwardsMay 12, 2025
CASE Awards Now Accepting Entries For 2025

The deadline to submit is June 16.

Lugano Diamonds store in Greenwich, Connecticut
IndependentsMay 09, 2025
Lugano Diamonds CEO Resigns Amid Internal Investigation

Moti Ferder stepped down Wednesday and will not receive any severance pay, parent company Compass Diversified said.

Coeur Percé Scapular Necklace and Love Baby Locket
CollectionsMay 09, 2025
Pieces of the Week: Marie Lichtenberg’s Collaborations for Mother’s Day

Lichtenberg partnered with luxury platform Mytheresa on two designs honoring the connection between mothers and daughters.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy