![]() ![]() ![]() Last month, Home Depot projected its first decline in annual revenue since 2009 in the aftermath of the bursting of the housing bubble and financial crisis. The company noted that even higher-income shoppers were switching to some canned food, like chicken and tuna. Higher interest rates have also made borrowing for a car or getting a mortgage for a house more expensive.Įarlier this month, retailers wrapped up their fiscal first quarter earnings season, which showed how still-high inflation in many areas is forcing shoppers to further cut back on discretionary items like clothing to afford their larger grocery bills.Īmong the latest to report: Macy's slashed its annual outlook after a spending pullback this spring, while Dollar General, which caters to low income shoppers, cut its annual sales and profit outlook as consumers turn more cautious.Ĭostco Wholesale Corp.’s chief financial officer, Richard Galanti, noted that customers are trading down from beef to poultry and pork in recent months. Under the weight of higher prices, some shoppers have slowed their spending or traded down to cheaper goods and less expensive stores like Walmart. ![]() That's a possible sign that the Fed's rate hikes over the past year might be slowing the job market. The government's monthly retail sales report offers only a partial look at consumer spending it doesn’t include many services, including healthcare, travel and hotel lodging.Īmericans have remained resilient in their spending even with signs of weakness elsewhere in the economy, but there are more clouds forming.Ī solid job market has helped support spending, though the latest Labor Department report on unemployment claims, issued Thursday, showed that the number of Americans applying for these benefits remained elevated. “We expect the slowdown in consumer spending to accelerate in the second half of the year as labor market gains falter, the buffer from excess savings shrinks and credit conditions tighten further.” “While they are still spending, consumers are becoming more financially cautious as lingering inflation and the Federal Reserve’s rate hikes take their toll, ” Lydia Boussar, senior economist at EY-Parthenon, said in a report. ![]()
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