America’s Shopping Slowdown In The Quarter Of 2024

Elevated inflation and the highest-ever interest rates are wearing out US consumers. Savings left to use during COVID-19 are now gone, and borrowers are racking up debts. Retailers say shoppers are sick of constantly growing prices and are changing their purchasing behavior.

US citizens bought a bunch of products and services after the COVID-19 pandemic, which continued till last year. People gladly sold out high-profile concerts and broke travel records, removing the anticipated recession. 

America’s solid job market keeps the trends alive, with wages outpacing inflation. The Chief officer at the BMO (Bank of Montreal) family office, Carol Schlief, told CNN, “As long as people stay employed, they’ll continue to spend because it’s hard to pull back dramatically without feeling like you’re short-changing yourself.” She added, “However, consumers are being very selective now, and they will cut back if they have to.” 

A similar trend of low shopping was seen in April this year when US retailers and restaurants didn’t have many sales. Consumption of goods, which accounts for two-thirds of the US economy, grew 2% in the first quarter, but it was 2.5% less than expected. This resulted in gross domestic product being revised at 1.3%, which was estimated at 1.6% at the beginning. Economists say data will be shared on Friday showing how consumers slowed spending in April compared to March. 

The employment report for April showed that employers added only 175,000 jobs; however, economists projected 235,000 jobs in a FactSet poll. It has caused the unemployment rate to reach 3.9% from 3.8 %.

Walmart saw customers shopping frequently in the first quarter of  2024. Higher-profile consumers were buying groceries, with signs showing their tough financial condition. Lower-income consumers mostly bought private-label brands and $1 items.

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