Despite the challenges posed by high interest rates and inflation, consumer spending remains resilient, according to National Retail Federation Chief Economist Jack Kleinhenz. In fact, despite a decline in growth in the first quarter of 2024, consumers are still spending more compared to a year ago.

Kleinhenz attributed this resilience to several factors. Firstly, inflation has caused a slowdown in economic expansion, but indicators like a strong job market and ongoing spending by consumers and businesses are keeping the economy afloat. Secondly, total retail sales exceeded expectations in March, rising by 4% year-over-year according to the U.S. Census Bureau. This was largely due to a robust labor market with solid job growth and rising wages.

In March, there was also a significant increase in job openings, with the three-month average payroll gain reaching its fastest pace in a year at 276,000. This suggests that businesses are optimistic about future demand for goods and services and are willing to invest in hiring new workers to meet that demand.

Despite some weaknesses in the economy – such as non-farm payrolls rising by only 175,000 in April (falling short of estimates at 240,000) – sectors like healthcare, social assistance, transportation