The retail trade organization says economic indicators, in particular employment levels, suggest the country is not in a recession.
’s Monthly Economic Review, which noted that gross domestic product declined 1.6 percent year-over-year in the first quarter and 0.9 percent in the second quarter. Two consecutive quarters of decline is a common informal indicator of a recession, but the official declaration is up to the National Bureau of Economic Research, which defines a recession as a significant decline spread across the economy. The bureau has yet to rule on whether the current downturn meets that definition.
“A critical indicator that could signal the onset of a recession would be a significant downturn in employment,” Kleinhenz said. But the NRF pointed out that the unemployment rate stood at 3.6 percent in June, nearly half a percentage point lower than the beginning of the year and only slightly above the 50-year pre-pandemic low of 3.5 percent seen in January 2020.
Still, as Kleinhenz said, “it is now clear that the world has changed” since the beginning of the year. He cited factors “that could not be anticipated earlier including the persistence of COVID-19, continuing supply chain challenges, the ongoing war in Ukraine and other issues that have driven the highest inflation rates in 40 years.”
In addition, the NRF said the savings rate is expected to fall “as consumers dip into their pandemic-era savings to pay for high food and energy costs as well as discretionary spending for travel and entertainment.”
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