Consumers listening to Charlie Chan
The Biden economy reminds me of that line from Charlie Chan: "In these troubled times, best to be economical."
We hear about unemployment numbers and how inflation is dropping. You hear that, and then you go shopping. This economy looks very different when you put items in your grocery cart. Don't take my word for it, but rather, watch the retailers. This is the story:
Retailers from Macy's to Dollar General have issued warnings on consumer spending, slashing their sales forecasts and citing an increasingly challenging economic environment, including stubbornly high inflation.
In an earnings report on Thursday, Macy's said same-store sales sank 8.7 percent last quarter, forcing the New York-based department store to cut prices on clothes and other discretionary items.
Macy's results concluded the retail industry's earnings season, which showed how stubbornly high inflation, particularly in food, is forcing shoppers to further cut back on discretionary items like clothing to afford their soaring grocery bills.
Meanwhile, Dollar General, which caters to low-income shoppers and is the fastest-growing US retail chain by store locations, also cut its annual sales and profit outlook on Thursday, sending the company's stock down 19.55 percent for the day.
Dollar General said it saw sales growth in groceries and other basic necessities, but that was offset by declines in seasonal, home and apparel items as inflation bit into consumer budgets.
Yes, consumers are surely going economical as inflation is eating their wallets alive. In North Texas, gasoline is back to $3.19 a gallon, and the pump gets to $35 way too fast. Going out to eat is no better, and a $45 after-Mass lunch makes you scream and tell President Biden to go to confession.
Yes, U.S. consumers are counting their pennies, and the retailers know it.
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Image: Public Domain.