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FloristsReview.com 57 Analytics believes that the nation will avoid a recession in 2024, attributing its forecast of a "soft landing" to resilience in labor markets, a robust housing market and consumer confidence. (A "soft landing" refers to a moderate economic slowdown following a period of growth. It is what the Federal Reserve aims for when it raises interest rates to curb inflation and cool a hot economy without setting off a significant decline in economic activity [recession].) Businesses looking to borrow funds to fuel capital investments, though, had best prepare for a tougher negotiating "The first thing retailers should always watch is the state of the labor market, especially with job growth slowing. That's vitally important for retailers because consumers need job growth to have the income growth that results in retail sales growth." — Scott Hoyt, Ph.D., senior director of consumer economics for Moody's Analytics environment. "e banking sector is in retrenchment, and lenders are becoming more risk averse," says Anirban Basu, Ph.D., J.D., chairman and CEO of Sage Policy Group in Baltimore, Md. "As a result, developers are having more difficulty lining up financing." Fueling the concern among financial institutions is a recent spate of loan delinquencies and bankruptcies. Banks are looking at their portfolios and seeing where they can tighten. Companies holding inexpensive pre-pandemic loans will see an earnings hit when they need to refinance at six or seven percent. WHAT TO WATCH In the opening months of 2024, Hoyt suggests that retailers look at employment levels to get an early read on how the year will go. "e first thing retailers should always watch is the state of the labor market, especially with job growth slowing," Hoyt explains. "at's vitally important for retailers because consumers need job growth to have the income growth that results in retail sales growth." e second important key indicator will be trends in oil and gasoline prices. "If fuel prices stay in their recent range, that's good news for retailers," Hoyt continues. "If they spike again, which is not inconceivable given everything going on in Russia, the Middle East and elsewhere in the oil-producing world, that would cause a severe problem for retailers because it would force consumers to spend more of their budgets on energy and less on goods." Whatever the condition of the tea leaves, retailers will encounter a tougher operating environment in 2024. "is year, we will face uncertainty about inflation and interest rates, labor shortages, rising energy costs, a slowdown in China's economy and recurring threats of a federal government shutdown," says Palisin. "ere are a lot of spinning plates in the air, and some of them may fall and crack."

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