SurveysMay 19, 2022
5 Predictions for Jewelry Retail in the Second Half of 2022SurveysJul 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.
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 …
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.
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.
More on Surveys
The Latest
MajorsJun 26, 2025
Why Rocksbox Is Opening Stores As Signet Jewelers DownsizesRocksbox President Allison Vigil shared the retailer’s expansion plans, and her thoughts on opening stores in malls.
IndependentsJun 26, 2025
Penny Ruston Dies at 80 The creator of the WJA Chicago chapter is remembered as a champion for women in the jewelry industry and a loving grandmother.
CollectionsJun 26, 2025
Jam Out With Sorellina’s Jimi Hendrix-Inspired JewelsThe “Playlist: Electric Dreams” collection brings lyrics from the musician’s song, “Little Wing,” to life through fine jewelry.
Brought to you by
Investing in the Next Generation of Bench JewelersThe Seymour & Evelyn Holtzman Bench Scholarship from Jewelers of America returns for a second year.
Events & AwardsJun 26, 2025
The Jewelry Symposium Is Looking for Speakers for 2026 EventThe event is set for May 16-19 in Detroit, Michigan.
Weekly QuizJun 26, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
IndependentsJun 25, 2025
Marissa Collections Opens in Nantucket as Legal Fight ContinuesThe Vault’s Katherine Jetter is accusing the retailer of using info she shared for a potential partnership to move into Nantucket.
CrimeJun 25, 2025
Customs Nabs Another Big Shipment of Fake Cartier, Van Cleef JewelryAgents seized 2,193 pieces, a mix of counterfeit Cartier “Love” and “Juste Un Clou” bracelets, and Van Cleef & Arpels’ “Alhambra” design.
Brought to you by
Jewelers of America is Headed to Las Vegas for JCK 2025The countdown is on for the JCK Las Vegas Show and JA is pulling out all the stops.
CollectionsJun 25, 2025
Splash into Karina Choudhrie’s Collection of Underwater Circus PerformersThe designer brought her children’s book, “The Big Splash Circus,” to life through a collection of playful fine jewelry characters.
Events & AwardsJun 25, 2025
JA Announces Impact Initiative Fund RecipientsThe trade association has chosen the recipients of the funding initiative it formed to foster the growth and sustainability of the industry.
SourcingJun 25, 2025
2025 AGTA Spectrum Awards Open for EntriesThe organization has also announced this year’s slate of judges.
EditorsJun 24, 2025
The Best New Jewelry from Couture 2025, Part 2Associate Editor Natalie Francisco shares 20 additional pieces that stood out to her at the Couture show.
IndependentsJun 24, 2025
Colorado Bench Jeweler Celebrates 50 Years With Local RetailerLori Tucker started at Williams Jewelers when she was 18 years old.
WatchesJun 24, 2025
Citizen’s New ‘Fantastic Four’ Watch Is Literally Super The “Marvel | Citizen Zenshin” watch is crafted in Super Titanium and has subtle nods to all four “Fantastic Four” superheroes on the dial.
MajorsJun 24, 2025
Tacori, QVC to Launch Exclusive Lab-Grown Diamond Jewelry CollectionThe “XO Tacori” collection was designed to blend luxury and accessible pricing.
GradingJun 23, 2025
GIA Names New President and CEO Pritesh Patel, the lab’s chief operating officer, will take over as president and CEO of GIA.
Recorded WebinarsJun 23, 2025
Watch: Top Trends at Couture, JCK Las Vegas 2025National Jeweler and Jewelers of America discuss the standout jewelry trends and biggest news to emerge from the shows this year.
SourcingJun 23, 2025
Diamond Producers, Organizations to Kick in Money to Promote Natural DiamondsSignatories to the “Luanda Accord” committed to allocating 1 percent of annual diamond revenue to the Natural Diamond Council.
Events & AwardsJun 23, 2025
Jose Hess Design Awards Celebrate 6 Jewelry DesignersThe winning designs captured the “Radiance” theme.
Events & AwardsJun 23, 2025
Gem Awards Now Accepting Nominations for 2026Nominations in the categories of Jewelry Design, Media Excellence, and Retail Innovation will be accepted through July 30.
TrendsJun 20, 2025
Dua Lipa Stays On-Trend With Chunky Engagement RingThe singer’s ring ticks off many bridal trends, with a thick band, half-bezel setting, and solitaire diamond.
TrendsJun 20, 2025
Piece of the Week: Yvonne Léon’s ‘Python Gold’ BraceletThe bracelet references vintage high jewelry and snake symbolism as a playful piece where a python’s head becomes a working belt buckle.
CrimeJun 18, 2025
7 Men Indicted in $100M Brinks Jewelry HeistThe heist happened in Lebec, California, in 2022 when a Brinks truck was transporting goods from one show in California to another.
AuctionsJun 18, 2025
Historic ‘Marie-Thérèse Pink’ Diamond Fetches $14M at Christie’sThe 10-carat fancy purple-pink diamond with potential links to Marie Antoinette headlined the white-glove jewelry auction this week.
EditorsJun 18, 2025
Q&A: Caryl Capeci Dives Into Cruise Jewelry ShoppingThe Starboard Cruises SVP discusses who is shopping for jewelry on ships, how much they’re spending, and why brands should get on board.
AuctionsJun 18, 2025
16th-Century ‘Gresham Grasshopper’ Ring Sells for $56KThe historic signet ring exceeded its estimate at Noonans Mayfair’s jewelry auction this week.
CollectionsJun 18, 2025
Kirk Kara Celebrates 135 Years With New JewelsTo mark the milestone, the brand is introducing new non-bridal fine jewelry designs for the first time in two decades.
