The latest results and forecasts from retailers indicate that U.S. consumer spending is under stress due to increased living costs and existing debts, posing challenges for the retail sector during the back-to-school and holiday seasons.
Consumer spending growth is slowing as the economy stabilizes, with consumers prioritizing essential purchases and adjusting their spending habits in response to rising interest rates and financial pressures.
Despite the Federal Reserve's aggressive interest rate hikes, U.S. consumer spending has not faltered, as seen in the success of the new Caesars casino in Danville, Virginia, which has exceeded expectations and attracted significant betting activity.
Americans continued to spend on dining out despite concerns about recession and inflation, with retail sales at restaurants and bars increasing by 11.8% in July and 9.5% in June compared to the same period last year, according to the Commerce Department. The strong consumer spending in this sector is seen as a positive sign for the economy and has been reflected in the earnings growth of restaurant companies.
US consumer spending is showing resilience and robust growth, although signs of a slowdown are emerging, potentially related to the public's perception of a deteriorating financial situation due to high inflation and rising interest rates, despite the fact that households still have higher deposits compared to pre-pandemic levels.
Australian retail sales rebounded in July, but the annual rate slowed, indicating that high borrowing costs are slowing consumer spending and not affecting the outlook for interest rates.
The U.S. economy grew at a 2.1% annual rate in the second quarter, showing resilience despite higher borrowing costs and a slight downgrade from the initial estimate of 2.4%, driven by consumer spending, business investment, and government outlays.
Consumer spending in China rebounded in August, with all categories, including apparel, automotive, food, furniture, appliances, and luxury, experiencing increased sales compared to July, according to a survey by the China Beige Book. Retail sales in July rose by 2.5% year-on-year, raising concerns about China's economic growth, but the August survey showed a surge in spending, particularly in the services sector, which saw continued strength in travel and hospitality. Additionally, corporate borrowing increased as the cost of capital declined, indicating a boost in business activity. However, China's property sector continued to worsen, with house prices barely growing and home sales declining.
US consumer spending increased by the most in six months in July, driven by strong demand for goods and services, but slowing inflation rates suggest that the Federal Reserve will keep interest rates unchanged next month.
Consumer spending is driving third-quarter GDP growth, but unsustainable spending habits, tightening lending standards, and the depletion of pandemic savings may lead to a decline in consumer spending in early 2024.
Consumer prices in the US rose 0.2% from the previous month, and 3.3% annually, indicating persistent high inflation and posing a challenge to the Federal Reserve's efforts to curb it; core prices, which exclude food and energy, also increased 0.2% from the previous month and 4.2% from the previous year.
U.S. consumer spending increased in July, boosting the economy and reducing recession risks, but the pace is likely unsustainable as households dip into their savings and face potential challenges from student debt repayments and higher borrowing costs.
British consumer spending growth slowed in August, despite a surge in cinema takings after the release of films like "Barbie", with spending on essentials such as food and fuel growing at its slowest rate since April 2020, pointing to a weakening economy.
The U.S. economy experienced modest growth in July and August, driven by pent-up demand for leisure activities, while nonessential retail sales slowed, according to the Federal Reserve's "Beige Book" survey.
Consumer spending in the US is expected to decline in early 2024, marking the first quarterly decline since the start of the pandemic, according to a survey by Bloomberg. The pessimism is attributed to high borrowing costs and the depletion of COVID-era savings.
Consumer spending in the US has supported the economy despite concerns of a recession, but rising interest rates, the resumption of student loan payments, and dwindling savings are predicted to put pressure on consumers and potentially lead to a shrinking of personal consumption.
Consumer spending in the US is showing signs of cooling, with retail sales expected to slow down in August, indicating that the resilience of the consumer may be waning due to increased borrowing, depleted savings, and the impact of inflation.
U.S. consumer prices rose the most in 14 months in August due to surging gasoline prices, but underlying inflation only increased slightly, potentially allowing the Federal Reserve to keep interest rates unchanged next week.
Despite claims by the Biden administration and corporate media that inflation is decreasing, the latest consumer price index from the Bureau of Labor Statistics shows that Americans paid 3.7 percent more for basic consumer items in August compared to the previous year.
Inflation in the US accelerated for the second consecutive month in August due to rising costs of rent and gasoline, with the consumer price index rising 0.6% from the previous month and 3.7% from the same time last year.
Wholesale inflation in the US rose more than expected in August, with the producer price index increasing by 0.7%, the largest monthly gain since June 2022, counteracting recent data that suggested price increases had been slowing down.
Retail sales in the US rose 0.6% in August compared to July, but the increase in gas prices could impact consumer spending during the holiday shopping season, according to a report from the Commerce Department. Excluding gas sales, retail sales only increased by 0.2% in August.
U.S. consumers have significantly reduced their spending over the past six months and plan to continue doing so during the upcoming holiday season, with the majority cutting back on non-essential items and essential items.
US retail sales, excluding automotive, are expected to rise by 3.7% over the holiday shopping season, indicating a return to pre-pandemic levels of holiday spending, driven by a more normal inflation environment and consumers' willingness to spend on experiences, electronics, and dining out.
