b'THE OFFICIAL NFBA MAGAZINEMacroeconomic OutlookIndustry Snapshots Consumers are spending more than ever. Annual US Total Retail Sales and annual US Total Personal Consumption Expenditures Arrow denotes 12-month moving total/average direction. (which include spending on services as well as goods) are at record highs. However, both are rising at slowing rates. BUSINESS ECONOMICSThe ongoing spending rise is largely due to the financial stability RETAIL SALES of the consumer. Although consumers are now saving a smaller portion of their incomes than earlier in the pandemic, their debts remain manageabledelinquency rates are low relative to recent years. Additionally, labor market conditions favor the consumer; WHOLESALE TRADE throughout 2022, there have been roughly two job openings for every person seeking a job. Wages and real personal income (excluding transfer payments) are rising, as well. Consumer inflation has declined for three straight months from a tentative June peak, AUTO PRODUCTION indicating preliminary signs of a disinflation trend. We anticipate 2023 will be characterized by disinflation, which will help ease some of the pricing burden on consumers.MANUFACTURINGConsumers financial health will drive further rise in spendingwe anticipate growth for Retail Sales on both a dollars basis and an inflation-adjusted basis through at least 2023. However, the pace of ROTARY RIG rise for consumer spending will likely slow for the majority of this time.Businesses are also in good financial standing. Annual US CAPITAL GOODS Nondefense Capital Goods (excluding aircraft)a measure of business-to-business spendingare also at record highs, though the pace of rise is slowing as demand cools amid a softening US economy. However, businesses have ample backlogs to work NONRESIDENTIAL CONSTRUCTION through, which will help support New Orders spending.The ongoing spending rise is largely due to the financial RESIDENTIAL CONSTRUCTION stability of the consumer.US Domestic Corporate Profits are at record highs, signaling that many businesses have the means to invest in new capital. As with Consumer Prices, we anticipate disinflation in Producer Prices in 2023, which will help ease pressure on businesses margins. Overall, SteepMild Rise Flat MildSteepwe anticipate slowing growth will characterize business-to-business Rise Decline Decline spending in 2023.The Federal Reserve poses a major risk to our longer-term outlooks for consumer and business spending. The Fed has taken an aggressive approach to trying to rein in inflation and the labor market this yearsince March, the Fed has raised the federal funds rate by 300 basis points. The body has signaled that further rate increases are to come, and it began reducing its balance sheet (quantitative tightening) during the second quarter. There is the potential that the Fed will over-tighten, which has occurred in the past, potentially resulting in a more severe cyclical downturn for the US economy. We are monitoring the situation closely.20 / FRAME BUILDER - NOV2022ITReconomics.com 2022 All Rights Reserved 1'