Despite Economic Challenges, Consumer Spending Resilient in Q1 2024″.

Despite high interest rates and other economic challenges, consumer spending continues to show resilience, according to National Retail Federation Chief Economist Jack Kleinhenz. In the first quarter of 2024, the U.S. economy saw a decline in growth compared to the previous quarter, but consumers are still spending more compared to a year ago.

Kleinhenz noted that while inflation has caused a slowdown in economic expansion, indicators like a strong job market and ongoing spending by consumers and businesses are keeping the economy resilient. The NRF’s Monthly Economic Review reported that GDP grew by 1.6% in Q1, down from 3.4% in Q4 2023. Despite this, consumer spending growth decreased from 3.3% in Q4 but still showed a year-over-year increase of 2.5%.

Total retail sales exceeded expectations in March, rising by 4% year-over-year according to the U.S. Census Bureau. Kleinhenz attributed the strong spending growth to a robust labor market with solid job growth and rising wages. In March, there was a significant increase in job openings, with the three-month average payroll gain reaching its fastest pace in a year at 276,000.

In April, non-farm payrolls rose by 175,000, falling short of estimates at 240,000. The unemployment rate increased slightly to 3.9%. Despite this setback, sectors like healthcare, social assistance, transportation and warehousing showed job gains overall the U.S economy remains strong due to consumer spending and a strong labor market