The economy is still growing, but its momentum is slowing, according to the National Retail Federation.
"The U.S. economy continues to expand but recent data is signaling a slowdown in its momentum," NRF Chief Economist Kleinhenz said in a press release. "The economy is slowing but not halting."
"While consumers are still spending, the composition of their spending continues to favor services over retail goods and even then, there was less momentum going into the third quarter," said Kleinhenz.
The economist's statements were published in the September issue of NRF's Monthly Economic Review which reported that the Bureau of Economic Analysis estimates gross domestic product grew at a 2.1% annual rate, rather than the 2.4% reported earlier.
"Consumer confidence took a bit of a hit in August as high prices and interest rates weighed on shoppers' decisions," Kleinhenz said.
Sales got "a midsummer boost" from Amazon's Prime Day, special deal days offered by other retailers and entertainment-related events, according to the release. But Kleinhenz said the number was partially lifted because of comparison against low sales at the same time last year.
NRF forecast in March that 2023 retail sales would increase between 4% and 6% over 2022. Since then, however, the Fed's interest rate increases have slowed the economy and "there is a good chance that sales will end up in the lower range of the forecast, if not lower," Kleinhenz said.