Economic growth withstood inflation, high interest rates and other challenges in 2024 and should continue to show strength in 2025, according to the National Retail Federation’s (NRF) Chief Economist Jack Kleinhenz.

“The U.S. economy ended 2024 on a high note and the outlook looks promising for 2025,” Kleinhenz said in a press release. “Recent performance shows the economy is on solid footing and has been growing at a steady pace and above its historical average. The labor market is healthy, unemployment is low, inflation has fallen almost to the Federal Reserve’s target even though it remains somewhat sticky, and the direction of interest rates remains lower.”

Employers created 227,000 jobs in November 2024, an improvement from a weaker report in October, while the share of people age 25 to 54 who were working or looking for work in November remained at 83.5%, which was down from a cycle high of 84% over the summer.

The past year “was marked in large measure by the impressive resiliency of the consumer and a sturdy labor market,” with consumer spending supported by low unemployment and wage gains that outpaced inflation even as employers slowed hiring, Kleinhenz said.

According to NRF, consumer spending on both goods and services “grew 5.5% year over year unadjusted for inflation in November and December combined, while disposable personal income was up 5.2% year over year, helping boost consumer purchases.”

There was a “disconnect between strong consumer spending and weak consumer confidence throughout 2024, with shoppers still concerned about high prices even though most inflation is now in services rather than goods,” wrote NRF.

Yet, during the holiday season, consumers spent 3.8% more from November 1 through December 24 than they did in the same period the previous year, according to Mastercard SpendingPulse.