Economy Showing Signs of Mild Slowdown in 2023: NRF Chief Economist

The U.S. economy is showing signs of a mild slowdown in 2023, as Federal Reserve rate hikes adopted to manage inflation “are having their desired effect,” according to Jack Kleinhenz, chief economist for the National Retail Federation (NRF).[0] Kleinhenz characterized the economy as “more resilient than expected” in the February issue of NRF’s Monthly Economic Review.[1]

Kleinhenz noted that the success of the economy will depend largely on the Fed’s ability to strike the right balance between interest rates and inflation.[2] Though the slowing momentum of inflation could lead to a reassessment of future rate hikes or even a reduction in rates, they will likely remain “in restrictive territory” for the remainder of the year.[2]

Although there have been reports of layoffs from some major companies, small businesses are still actively recruiting.[0] In December, the unemployment rate was at an unprecedented low of 3.5 percent in the last 50 years.[2] With spending slowing, the Personal Consumption Expenditure Index—the Fed’s preferred measure of inflation—eased to 5 percent in December, its slowest annual pace in over a year.[2] At its February meeting, the Fed only raised interest rates by a quarter of a percentage point, rather than the half-point increase that had happened in December, due to the results.[2]

Despite two consecutive quarters of negative numbers in the first half of the year—often an unofficial marker of a recession—the third quarter saw gross domestic product grow 3.2 percent year-over-year.[0] Growth slowed to 2.9 percent in the fourth quarter, but was still 2.1 percent higher than 2021.[2] While the challenges are far from over, it seem a full-blown recession is unlikely—at least according to one economist, that is.[3]

An emergency fund is an excellent way to prepare for the unexpected and to help weather any potential storms.[4] Financial experts recommend having enough money in your emergency fund to cover at least three to six months’ worth of living expenses.[4] Include “emergency savings” in your budget as an expense and set a goal for yourself.[5] Store money saved in an emergency fund in a liquid investment vehicle, like a money market account or a high-yield savings account that you may easily access.[4]

0. “Recession? Unlikely. But See What Challenges This Economist Says Are Ahead” Gifts & Decorative Accessories, 3 Feb. 2023,

1. “NRF: Recession unlikely, growth ahead” Retail Customer Experience, 7 Feb. 2023,

2. “Retailer Association Sees Growth in 2023, Says Recession Unlikely”, 6 Feb. 2023,

3. “Consumers’ Financial Resilience Offers Bright Spot Amid Recession Fears” REBusinessOnline, 2 Feb. 2023,

4. “A Possible Recession in 2023 Means You Need To Do These Things for Your Budget” AOL, 3 Feb. 2023,

5. “How to prepare for a recession” SFGATE, 31 Jan. 2023,