Recently, executives from some of the biggest tech, retail, and consumer product companies have tried to answer the state of the economy, which has teetered on the brink of recession.
In Silicon Valley, profits from tech companies like Google and Apple usually surpass expectations. Still, executives from those companies have said there are signs of decreased consumer spending. Procter & Gamble, a consumer products giant, said that it is expecting a more challenging 2023. MasterCard noted that spending was steady among the wealthy but decreased among lower-income customers.
Walmart and Best Buy have warned that it will be worse than expected when they report earnings in August due to changes in consumer habits.
“We’re seeing strong growth,” said Amazon Chief Financial Officer Brian Olsavsky. “But we’re cognizant things could change quickly.”
The Federal Reserve again raised rates this week to make it harder for people to borrow more money and keep spending which is aimed at slowing inflation and stabilizing the economy, but it is a tricky balance. Some companies have already reported warning signs.
“As high inflation has continued, and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened,” Best Buy chief executive Corie Barry said.
Thomas Combs, a small business owner in Dallas, said he has “completely changed” the way he spends money, such as cutting back on gourmet coffee and ice cream. He has also stated that his car has gotten more expensive when he needs to repair it, and he knows how difficult it would be to move to a different house or upgrade his vehicle.
“I don’t like seeing corporations having record earnings the last couple of quarters then to be told of supply chain problems or refining or whatever is to blame for higher consumer prices,” Combs said. “You grow pessimistic but realize you must roll with it if you want to survive in today’s America.”
“There isn’t a wholesale drop in consumer spending,” said Edward Jones analyst Brian Yarbrough. At Walmart, many Americans who make lower income have prioritized their grocery budget over extras.
Link:
https://s3.amazonaws.com/appforest_uf/f1659260658010x372290339911993200/Corporations%20on%20the%20front%20lines%20of%20the%20economy%20say%20cracks%20are%20forming%20-%20The%20Washington%20Post.pdf
In Silicon Valley, profits from tech companies like Google and Apple usually surpass expectations. Still, executives from those companies have said there are signs of decreased consumer spending. Procter & Gamble, a consumer products giant, said that it is expecting a more challenging 2023. MasterCard noted that spending was steady among the wealthy but decreased among lower-income customers.
Walmart and Best Buy have warned that it will be worse than expected when they report earnings in August due to changes in consumer habits.
“We’re seeing strong growth,” said Amazon Chief Financial Officer Brian Olsavsky. “But we’re cognizant things could change quickly.”
The Federal Reserve again raised rates this week to make it harder for people to borrow more money and keep spending which is aimed at slowing inflation and stabilizing the economy, but it is a tricky balance. Some companies have already reported warning signs.
“As high inflation has continued, and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened,” Best Buy chief executive Corie Barry said.
Thomas Combs, a small business owner in Dallas, said he has “completely changed” the way he spends money, such as cutting back on gourmet coffee and ice cream. He has also stated that his car has gotten more expensive when he needs to repair it, and he knows how difficult it would be to move to a different house or upgrade his vehicle.
“I don’t like seeing corporations having record earnings the last couple of quarters then to be told of supply chain problems or refining or whatever is to blame for higher consumer prices,” Combs said. “You grow pessimistic but realize you must roll with it if you want to survive in today’s America.”
“There isn’t a wholesale drop in consumer spending,” said Edward Jones analyst Brian Yarbrough. At Walmart, many Americans who make lower income have prioritized their grocery budget over extras.
Link:
https://s3.amazonaws.com/appforest_uf/f1659260658010x372290339911993200/Corporations%20on%20the%20front%20lines%20of%20the%20economy%20say%20cracks%20are%20forming%20-%20The%20Washington%20Post.pdf
