US Goldilocks / UK Store Inflation
The latest survey from the National Association for Business Economics (NABE) showed a sharply higher growth outlook from its last forecast just a few months ago. In December last year, the NABE predicted that the US economy would grow just 1.3% in 2024. However, the consensus is now for the economy to grow by 2.2%, along with inflation continuing to fall and a healthy job market.
The improved growth projections stem from key sectors of the economy, such as consumer spending, business investment in structures and equipment, housing investment, and government spending all performing well. In addition, the NABE predicted that the Fed will start cutting its benchmark interest rate between April and June.
Mervin Jebaraj, the NABE Outlook Survey Chair, said with the release “NABE panelists forecast stronger economic growth, lower inflation, and lower unemployment rates than the Fed’s December economic projections, and more than three-quarters of the panelists forecast that the U.S. economy is heading for a soft landing in 2024”.
Is the U.S. economy having its "Goldilocks" moment?
Here in the UK, inflation in stores slowed to its lowest level since early 2022, offering additional relief to consumers as stores intensified discounting efforts and passed on lower costs. The overall increase in shop prices was 2.5% in February year-on-year, down from a 2.9% rise last month, representing the ninth straight month of decline, the British Retail Consortium (BRC) reported. Factors such as improved supply chain conditions, decreased costs for energy and fertilizers, and robust competition among retailers played significant roles, according to BRC Chief Executive Helen Dickinson.
Furthermore, data from the research agency Kantar revealed that grocery inflation fell to 5.3%, a drop of 1.5% from January. This aligns with the BRC's own data on food inflation, which indicated a significant slowdown from 6.1% to 5%, with an even more pronounced decrease in prices for fresh food items like meat, fish, and fruit.
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