The strong economic performance seen in 2024 is expected to carry over and influence growth this year, but there is also a wide range of uncertainty as the White House and Congress make decisions that will impact the economy, says National Retail Federation Chief Economist Jack Kleinhenz.
“While the U.S. economy has entered 2025 with a fair amount of momentum, the mix of policies being debated on immigration, tariffs, deregulation and taxes blur the economic outlook and its narrative, with many crosscurrents at work,” Kleinhenz said in the NRF’s latest Monthly Economic Review. “While deregulation and tax cuts could provide positive momentum, immigration restrictions and tariffs could be a drag on the economy and have adverse effects. Although recent economic data remains strong, we are concerned about the downside risks.”
Kleinhenz added that weak consumer perceptions and uncertainty from the lack of clarity regarding future government policies and regulations can significantly hinder business operations. “That, in turn, can cause a hesitation in consumer spending and make it difficult for companies to make investment and hiring decisions,” he said. “We are watching carefully and hoping for the best as much depends on how and when these policies are put in place.”
The March review said gross domestic product adjusted for inflation grew 2.8% in 2024, with “robust” consumer spending “fueling economic activity and making a consistent contribution to growth.” Overall consumer spending unadjusted for inflation was also up 2.8% year over year in 2024 and retail sales – excluding automobile dealers, gasoline stations and restaurants to focus on core retail – were up 3.6% unadjusted.
Click here for more from the NRF review.
