Bloomberg has a story about how "the US consumer spending binge that took hold during the pandemic is breaking down.
"The discretionary spending slump that started last year is delivering a new blow to big US retailers, according to a slew of earnings reports this week. Home Depot Inc. cut its annual profit forecast, citing a customer pullback. Target Corp. and Walmart Inc. warned that recent sales were at their strongest in February but weakened in March and again in April.
"The reports signal rising anxiety about US shoppers, who are forgoing purchases of furniture, apparel and electronics in order to afford basic goods.
"That’s stoking fears of a long-term drag on the economy that some analysts see playing out for years."
Here's how the slowdown is playing out for many supermarkets:
"About 90% of consumers are skimping on grocery bills, only buying what’s absolutely needed and ditching goods such as air fresheners and lawn fertilizer, according to NIQ, formerly known as NielsenIQ. In March, 35% of shoppers were only buying essentials, up three percentage points from October, based on an NIQ survey.
"More than half of Americans are switching to cheaper brands, according to an April survey from Attest. And some 90 million US adults are now struggling to pay for their usual home expenses - higher than after the pandemic hit and millions lost their jobs.
"While some are tightening their belts, others are relying on credit cards and loans to make ends meet. Credit-card balances are growing and carry higher financing rates, adding another headwind for spending."
- KC's View:
And yet, when the unemployment numbers come out this week, almost certainly phrases like "stronger than expected" and "indicating persistent strength" will be included in the stories.
That said, the continuing impasse over the raising of the debt ceiling has to be creating enormous anxiety among anyone paying attention and being realistic about what happens if the Republicans and Democrats don't come to an agreement. We'll go off an economic cliff if that happens, and the current conversations about unemployment and inflation and recession may seem quaint in comparison.