What Slowing Consumer Spending Means for the Economy

By: Anneken Tappe · November 16, 2023 · Reading Time: 2 minutes

Slow Spending

Strong spending has helped buoy an uncertain economy over the past few months. But American consumers might finally be tapping out.

Retail sales dipped 0.1% between October and September — the first decline since March after a strong summer for consumer spending.

Economic Sales Data

The sales declines were broad-based, though furniture stores registered the biggest drop. And while people continued to spend online, and go out to restaurants, sales in those spending categories expanded at a slower pace.

Target (TGT) noted on its latest earnings call that consumers are pulling back on discretionary spending, a sentiment echoed on recent earnings calls by other major retailers, including Home Depot (HD).

What Does This Mean?

Elevated inflation has been part of the economic story for the better part of two years, and consumers are at the very least exhausted by rising price tags. Perhaps it’s finally showing up in the data. That said, one data point alone isn’t enough to form a trend. We will have to wait and see how the rest of the holiday shopping season shakes out.

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