As US consumer confidence falls, retailers see long list of woes

by | Jul 26, 2022 | World

New data highlight the growing economic threat posed by runaway inflation in the United States.United States retail stocks were lower Tuesday, dragged down by an earnings warning from retail giant Walmart and fresh US data showing that consumer confidence fell in July to its lowest level since February 2021. The latest signals are stirring concerns that the economy may be headed towards a recession.
Walmart shares dropped nearly 9 percent after the mega-retailer cut its profit outlook for the second quarter and the full year, underscoring that rising prices for food and gas are forcing shoppers to cut back on items such as clothing that carry higher profit margins.
Shares of automaker General Motors (GM) also fell sharply, after the company announced that its second-quarter profit dropped 40 percent compared to a year ago. Computer chip and parts shortages have clobbered factory output and drove the company’s US sales down more than 15 percent.
GM, based in Detroit, earned $1.67bn from April through June, a stark contrast to the $2.79bn it made a year earlier. The company said it was unable to deliver nearly 100,000 cars during the quarter because it lacked parts.
Fresh US data on Tuesday also showed just how much American shoppers’ sentiment has fallen, with the Consumer Confidence Index decreasing for a third month to 95.7 from a downwardly revised 98.4 reading in June. That’s the lowest reading since February 2021.

All eyes are now on the Federal Reserve, the US central bank, which is expected to announce a rate hi …

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