It’s been a big week for retailers, with Walmart, Target, Home Depot, Lowe’s and others offering new insights into the habits – and mindset – of the American consumer.
A slew of revenue, coupled with new government data, shows they are still spending, albeit at a slower pace and more strategically. But it’s clear shoppers are bogged down by stubbornly high prices, especially on food and gasoline.
And the longer inflation stays at high levels, the more impact it has, said Neil Saunders, chief executive of analyst firm Global Data. “The first two months of really big price increases, it’s a bit of a pain, but people don’t notice that much,” he said, but as time goes on, “people start saying, ‘ It becomes a real drag.’”
The data confirms it: consumer confidence hit an all-time low in June, although the University of Michigan index rose slightly as gasoline prices retreated from record highs recorded that month. . This is an important measure because people are more likely to spend if they feel economically stable. Consumer spending accounts for about two-thirds of the economy, so any decline is of interest to economists and policymakers because it could signal a recession. All this while the Federal Reserve is aggressively trying to cool the economy by raising interest rates to keep inflation under control.
Here are the main takeaways of the week: