Latest news with #retailspending
Forbes
8 hours ago
- Automotive
- Forbes
Retail Spending Falls For Second Month in a Row
Retail spending dropped by 0.9% in May—the second month in a row of falling spending as consumers appear to grow more cautious faced with anxiety over potential tariffs as the U.S. government negotiates trade deals with China and the European Union. The decrease in retail spending was driven by a steep decline in car sales, just two months after ... More consumers rushed to make car purchases before President Donald Trump's tariffs were scheduled to go into effect. The relatively sharper decline was driven by falling motor vehicle and car parts sales, which declined by 3.5% in May, according to Census Bureau data released Tuesday morning. The data also indicates consumers are cutting back slightly on food expenditures, with spending at grocery and liquor stores down by 0.7% and spending at restaurants and bars down by 0.9%. Spending on building materials, electronics, and healthcare products all decreased as well, but sales of furniture, clothing, sporting goods, and purchases from general merchandise stores and online retailers slightly increased over the last month. As of June 9, the Federal Reserve Bank of Atlanta is still forecasting a growth in GDP by 3.8% in the second quarter of 2025, and it is unclear if Tuesday's spending numbers will affect this estimate. Retail spending increased at an unusually high rate earlier this year, as economists predicted consumers would try to get ahead of President Donald Trump's planned tariffs on foreign auto manufacturers. Spending on cars and auto parts in March increased by a staggering 8.9%, according to the Census Bureau's most recent data. 'Given that March had seen the strongest monthly sales in two years, we expect some continued weakness in motor vehicle sales in June as the 'pull ahead' effect continues to suppress demand,' Lydia Boussour, the senior economist at EY-Parthenon told Forbes in emailed comments. The Census Bureau initially reported that retail sales continued to increase in April by about 0.1%, but quickly revised their calculations to indicate a slight decrease by 0.1%. Gasoline spending also fell by about 2% in May, likely driven by falling gas prices. Average gas prices have fallen below $3.00 per gallon in 25 states, although industry analysts believe this relief is unlikely to last long. The conflict between Israel and Iran could potentially raise oil prices as it threatens oil shipments through the Strait of Hormuz, which sees an average of 21 million barrels per day, according to the U.S. Energy Information Agency. Experts told Forbes that the most recent data indicates consumers are becoming more uneasy as potential tariffs and international conflict increase volatility in the market. 'While household balance sheets remain healthy, consumers are growing more cautious and increasingly selective with their spending amid lingering policy uncertainty, deteriorating labor market prospects and tariff anxiety,' Bossour said. The EY-Parthenon economist predicted a 'sharp deceleration in spending' the rest of the year before beginning to recover in 2026. 'The US consumer has kept economic growth going despite the tariff threats and trade disruptions,' Chris Zaccarelli, the chief investment officer at Northlight Asset Management, told Forbes in emailed comments. 'If the consumer begins to rollover, then it could lead to layoffs and a vicious cycle of slower spending and higher unemployment.' Zaccarelli said his firm remained cautious, with factors like the pending trade deals with China and the European Union, as well as the escalating conflict in Iran, potentially impacting the market in the near future. However, Zaccarelli also said that this month's decline could still be a 'one-off.' Removing spending on cars and gasoline, overall retail spending has only declined one month out of the year so far.
CTV News
10 hours ago
- Business
- CTV News
Stocks slip on Wall Street on signs of weaker spending by U.S. consumers
Traders Drew Cohen, left, and Joseph Lawler, center, work with specialist Patrick King on the floor of the New York Stock Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew) NEW YORK — U.S. stocks are falling following signals that one of the economy's main engines, spending by households, is weakening while Israel's conflict with Iran may be worsening. The S&P 500 was 0.3% lower in early trading Tuesday. The Dow Jones Industrial Average was down 163 points, or 0.4%, and the Nasdaq composite was 0.3% lower. Treasury yields also nudged lower in the bond market after a report said shoppers spent less last month at retailers than the month before and less than economists expected. Solar stocks fell amid worries that Congress may phase out tax credits for renewable energy. Elaine Kurtenbach, The Associated Press
Yahoo
23-05-2025
- Business
- Yahoo
UK shoppers more upbeat but cut back on retail spending
UK consumer confidence has shown signs of recovery in May, according to the latest BRC-Opinium Consumer Sentiment Monitor. Expectations for the state of the economy over the next three months improved to -36, up from -48 in April. Similarly, consumers' outlook on their personal financial situation rose to -12, compared to -16 the previous month. However, anticipated spending on retail declined to 0, down from +3 in April, while overall personal spending expectations remained steady at +10. Personal saving expectations dipped slightly to -5, from -4 in April. These shifts in consumer sentiment coincide with a period of easing geopolitical tensions and modest economic growth in the UK. The recent de-escalation of the US-China trade conflict and the UK's new trade agreements with major economies, including the US and India, may have contributed to the improved outlook. Helen Dickinson, Chief Executive of the British Retail Consortium, commented on the developments: "While agreements with the US and India may have helped this month's boost in consumer confidence, it is hoped the latest EU deal will drive further confidence in the outlook for the economy and personal finances." The over-60s demographic experienced the most significant increase in economic optimism, with their confidence levels rising nearly 20 points. Despite this improvement, they remain the most cautious age group regarding economic prospects. This uptick may be linked to recent stock market recoveries following previous volatility triggered by international trade tensions. Despite the overall rise in consumer confidence, expectations for retail spending have decreased. The anticipated retail spend fell to 0 in May, down from +3 in April, indicating a more conservative approach to discretionary spending. This trend suggests that consumers may still be exercising caution in their spending habits, possibly due to lingering uncertainties in the economic landscape. In light of the current economic climate, there are discussions around potential policy measures to stimulate consumer spending. One proposal is the reintroduction of a tax-free shopping scheme aimed at attracting high-value shoppers from abroad. Such a measure could benefit the retail, hospitality, and leisure sectors, potentially creating employment opportunities and boosting economic growth. As Helen Dickinson noted, "There is more the UK can do to encourage spending and trade: reintroducing a tax-free shopping scheme would attract more high value shoppers from abroad, benefitting retail, hospitality, and leisure, and creating employment opportunities and boosting economic growth." "UK shoppers more upbeat but cut back on retail spending" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Guardian
07-05-2025
- Business
- The Guardian
The Reserve Bank played it safe and didn't cut interest rates in April
The latest retail spending figures show that households continue to do it tough and that the Reserve Bank of Australia was wrong when it chose to keep rates steady in April. Back in the first week of the election campaign, if you recall, the Reserve Bank monetary policy board met and decided to do nothing. Things were confusing, things were uncertain. Better to do nothing. Also, there was an election on – best not to look political – play it safe. After that meeting the market predicted there would most likely be a rate cut at the next meeting on 20 May and probably three cuts by the end of the year. Now the market fully expects at least one rate cut in two weeks' time with a 56% chance of a 50 basis point cut to 3.6%. It also has fully priced in four rate cuts by the end of the year: If the graph does not display, click here What has happened between now and then is Donald Trump decided to upend world trade, and the Australian economy is less buoyant than the RBA hoped it was when it did nothing in April. In April, the board noted that household spending had picked up at the end of 2024. This was not, the RBA argued, just people searching for sales and taking advantage of discounts. Instead, it believed 'the pick-up in spending growth among components not affected by sales events suggested there had been a genuine improvement in underlying momentum'. The bank then noted that 'more recent indicators signalled that some of this pick-up had been sustained'. Well, I would love to know what those indicators were, because last Friday, while everyone was focused on the election, the Australian Bureau of Statistics released the quarterly retail trade figures. And they stunk. In the March quarter, the growth in the volume of things Australians bought in shops was flat. Once you took into account population growth, it fell: If the graph does not display, click here The 0.8% 'pick-up' in the last three months of 2024 was not a sign of 'genuine improvement' but actually a sign that consumers were taking advantage of sales. When you remove food purchases, retail spending in March fell 0.2%. Over the past year non-food spending rose 2.2%, which might sound better, but before the pandemic such spending grew on average 3.2%. If the graph does not display, click here No, spending is not picking up. We are not seeing a surge in demand that might put pressure on inflation. But it was good of the Reserve Bank to make mortgage holders wait another six weeks for a rate cut just to be sure. When you look at actual spending, and how much we are buying compared to what we were before the pandemic, it's pretty clear there is not a lot of demand in the retail sector. In the December quarter of last year, the volume of retail spending was 2.6% below the expected level, given the pre-pandemic trend. By the March quarter it was 3.1% behind. If the graph does not display, click here And the RBA's inaction was cruel because when it comes to cost of living, interest rates are the major issue. skip past newsletter promotion Sign up to Breaking News Australia Free newsletter Get the most important news as it breaks Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion On Wednesday the ABS released the latest cost-of-living indexes. These are essentially the inflation for various household types, but crucially unlike the official consumer price index measure of inflation, they include the cost of mortgage repayments. This, as you can image, has a sizeable impact, given what has happened over the past three years: If the graph does not display, click here Mortgage interest charges have gone up on average 163% for employee households (the households most likely to have a mortgage) since March 2022. That is why in that time the cost of living for employee households has risen 20.7% compared to official inflation going up 13.6%. And you might think that because the RBA cut interest rates in February, we should be seeing mortgage interest charges come down. Well, no – interest charges rose 1.5% in the March quarter despite the cut. That's because it takes time for the rate cuts to flow through to actual reductions in what you are paying: If the graph does not display, click here This is another reason why the RBA should have cut rates in April – the impact on households and the economy is not instant. The March quarter retail figures showed that households needed help then; instead, the RBA decided to wait until May to deliver help that will only arrive some months after that. And if you do feel like your mortgage repayments have become a huge burden, you are not alone. So large have been the impact of mortgage rate increases since March 2022 that they alone account for just under half of the entire increase in cost of living for employee households: If the graph does not display, click here Of course, this is just an average – it is an estimate for all employee households – including those who don't have a mortgage. So, the true impact is much larger for those who do have one. It means to reduce the impact of cost of living the biggest thing needed is more rate cuts. But I guess it is just as well the RBA did not cut rates in April. That might have been seen as political. It might have given the ALP too great of an advantage and led to them winning the election in a landslide. Best to be safe and wait and let households suffer in the meantime.
