US consumers spurn cars, couches and cruises, results show
US consumers are exhibiting fragility ahead of the peak period for corporate results next month, as some are struggling to pay bills and others are slowing purchases of cars, sneakers, and household goods, the week’s earnings show.
Data released on Friday showed US consumer spending increased more than expected in August, but aggressive interest rate hikes from the Federal Reserve as it battles stubbornly high inflation are slowing demand.
Nike, maker of Air Jordan and Converse sneakers, saw its shares tumble to the lowest level in 2-1/2 years on Friday, a day after the company said it needed bigger discounts to clear a build-up of inventory.
“We are seeing evidence of a slowdown in spending across a wide swath of the consumer space, with the combination of inflation and rising interest rates pressuring household budgets,” said Garrett Nelson, VP and senior equity analyst at CFRA Research.
Big-ticket items like furniture and cars that are typically financed have been hit particularly hard, he said.
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