• News
    • Brands and Retailers
    • Industry Press Releases
    • People
    • Show News
  • Gear
  • Events
    • OR Snow Show
    • OR Summer
    • OAX
  • About Us
    • Contact Us
SUBSCRIBE
  • News
    • Brands and Retailers
    • Industry Press Releases
    • People
    • Show News
  • Gear
  • Events
    • OR Snow Show
    • OR Summer
    • OAX
  • About Us
    • Contact Us
  • Subscribe
Q

News:
Industry Press Releases
May 10, 2023

NRF Economist Says First Quarter Showed Challenges of Bringing Inflation Under Control

The economic challenges brought on by COVID-19 are not over yet.  

By Press release
Share on Email
Share on Linkedin
Share on Facebook
Share on Twitter
[photo-by]
News:
Industry Press Releases
May 10, 2023

NRF Economist Says First Quarter Showed Challenges of Bringing Inflation Under Control

The economic challenges brought on by COVID-19 are not over yet.  

By Press release
Share on Email
Share on Linkedin
Share on Facebook
Share on Twitter

Slower-but-continued growth in gross domestic product and other economic indicators during the first quarter showed the difficulty of bringing inflation under control, National Retail Federation Chief Economist Jack Kleinhenz said today in the May issue of NRF’s Monthly Economic Review.

“The World Health Organization says the pandemic is over, and the U.S. government has ended its declaration of a public health emergency. But that doesn’t mean the economic challenges brought on by COVID-19 are over,” Kleinhenz said. “For the past year, the Federal Reserve has been trying to bring rampant inflation under control by raising interest rates. The effort has yet to reach its goal, and results from the first quarter show taming inflation without tipping the nation into a recession remains a formidable challenge.”

NRF logo“A slowdown in GDP is normally seen as a negative, but in the current context is key to controlling inflation,” Kleinhenz said. “Fortunately, the economic data is not consistent with a typical recession.”

Kleinhenz said the U.S. economy “remained in gear” during the first quarter even as GDP growth slowed to a modest 1.1% annual rate from the average 3% in the previous two quarters. The number could have been more than two percentage points higher, but many businesses reduced built-up inventories rather than producing or buying more goods. Consumer spending, which accounts for two-thirds of GDP, grew 6.5%, up from 0.1% growth the previous quarter as disposable personal income saw annual growth of 8.4%.

The Employment Cost Index showed growth in private manufacturing wages and salaries dropped to 4.9% in the first quarter from 5.1% the quarter before but remained above the 3.5% rate needed to be consistent with the Fed’s 2% inflation target. Heading into the second quarter, employment numbers were better than expected despite high interest rates, with a net jobs gain of 253,000, a year-over-year wage increase of 4.4% and the unemployment rate of 3.4% tying January for the lowest in more than 50 years.

Inflation as tracked by the Personal Consumption Expenditures Price Index – the Fed’s preferred measure – was 4.9% year over year in the first quarter. That was down from 5.7% in the fourth quarter and far below the 6.4% seen a year earlier. The core PCE index, which excludes volatile food and energy prices, was at 4.7%.

Amid those numbers, the Fed last week raised interest rates another quarter-point to an upper bound of 5.25%. Chairman Jerome Powell said sentiment on the Fed’s Federal Open Market Committee favors a pause in interest rate hikes, but that the panel is not yet ready to commit. Kleinhenz said the key questions are how the Fed will know when to stop raising rates and how soon after that it will start to lower them.

In announcing the increase, the Fed said tighter credit conditions are likely to “weigh on” economic activity.

“That is consistent with our views on the risks to the 2023 economic outlook,” Kleinhenz said. “But in the bad-news-is-good-news world of trying to control inflation, that may be exactly the result that is needed. The key is finding a way to control or manage the uncertainty.”

As the leading authority and voice for the retail industry, NRF analyzes economic conditions affecting the industry through reports such as the Monthly Economic Review.

About NRF

The National Retail Federation passionately advocates for the people, brands, policies and ideas that help retail succeed. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs – 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies. nrf.com

← Previous Article Next Article →
News Industry Press Releases

Danner Introduces First Modern, Recraftable Hiking Boot

The Mountain 600 Leaf GTX is built to explore, restore and repeat for years to come.

News Industry Press Releases

Big Agnes and DAC Introduce First Recycled Aluminum Tent Hubs

Longtime partners commit to recycled aluminum tent hardware.

News Industry Press Releases

Danner Introduces First Modern, Recraftable Hiking Boot

The Mountain 600 Leaf GTX is built to explore, restore and repeat for years to come.

News Industry Press Releases

White Duck Outdoors Announces Its Newest Tent, The Regatta 360

The Regatta 360 is designed to offer premium comfort and convenience and is offered in 13-foot and 16.5-foot sizes.

News Sponsored

Empower Your Brand’s Growth with vvast’s New Entry Point Packages

Introducing vvast's 360 Approach to D2C for High-Growth Brands.

News People

Wolverine Worldwide Announces Leadership Appointments

Chris Hufnagel was named company president and Janice Tennant and Rob Griffiths were added as key brand leaders to support Wolverine's global brand-building strategy.

News Brands and Retailers

Specialty Retailer Feral’s Used Gear Model Boosts Bottom Line

We toured the Denver-based outdoor specialty retailer to learn about business trends, future plans, and what's hot on store shelves.

News Industry Press Releases

Introducing Utu Outdoor Skincare, Advanced SPF Skincare for Outdoor Lovers

Utu’s mission is to protect, nourish and rejuvenate the skin and the planet.

Subscribe for free today!

FOLLOW US ON

  • Follow
  • Follow
  • Follow
© 2023 Emerald X, LLC. All Rights Reserved.

ABOUT    CAREERS    AUTHORIZED SERVICE PROVIDERS   TERMS OF USE   PRIVACY POLICY