The latest economic data has taken a toll on consumer companies, as a gauge of consumer confidence dropped from 108.7 in August to 103 in September, according to the Conference Board. Additionally, an economic expectations subindex indicated that consumers are bracing themselves for an impending recession. Brokerage firm Stifel’s survey echoed these concerns, revealing that American consumers are planning to curb discretionary spending outside of the holiday season.
The economic landscape presents several worrisome factors. Oil prices have surged by 34% since June, the yield on the 10-year Treasury note has risen from 3.7% to 4.5%, credit card balances have exceeded $1 trillion, and student loan payments will resume next month, with approximately 30 million people facing monthly payments of around $400 each. Alex McGrath, chief investment officer for money manager NorthEnd Private Wealth, warns that this confluence of factors could result in a “stagflationary setup” for the US economy.
Real estate also shows signs of a slowdown. While the S&P CoreLogic Case-Shiller National Home Price Index recorded a 1% gain in July compared to the previous year, suggesting tight supplies, new-home sales fell 8.7% in August to an annual rate of 675,000, according to the Commerce Department. These developments indicate a potential deceleration in the US property market.
United Natural Foods has experienced a sharp decline in its share prices after reporting a fiscal fourth-quarter loss and sales that fell short of estimates. The food wholesaler has also expressed concerns about continued weakness in 2024.
In Western Australia, pilots working for a Qantas Airways subsidiary have voted in favor of protected industrial action amid workplace agreement negotiations with the Australian flag carrier.
Furthermore, the possibility of a government shutdown looms, which could disrupt operations at the Securities and Exchange Commission and delay the initial public offering of German shoe company Birkenstock.
Target has announced the closure of nine stores in major cities including New York City, Seattle, San Francisco, and Portland, Oregon. The reason behind these closures is attributed to rampant theft and organized retail crime.
The current economic climate presents challenges across various sectors, and companies must brace themselves for the prolonged uncertainty that lies ahead.