{"id":2065839,"date":"2023-10-13T03:21:02","date_gmt":"2023-10-13T07:21:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ex-walmart-ceo-says-us-consumers-reaching-breaking-point\/"},"modified":"2023-10-13T03:26:49","modified_gmt":"2023-10-13T07:26:49","slug":"ex-walmart-ceo-says-us-consumers-reaching-breaking-point","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ex-walmart-ceo-says-us-consumers-reaching-breaking-point\/","title":{"rendered":"Former Walmart CEO warns that American consumers are nearing their limit."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fex-walmart-ceo-says-us-consumers-reaching-breaking-point%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2065839&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>The American Consumer \u200con\u2062 the Verge of Folding, Says Former Walmart CEO<\/h2>\n<p>The all-mighty American consumer, whose \u2063spending drives\u2064 the economy, is reaching a\u2064 breaking point and is on \u2063the verge of folding, according to former Walmart CEO Bill Simon.<\/p>\n<div class=\"my-5\">\n<p>Mr. Simon <a href=\"https:\/\/www.cnbc.com\/2023\/10\/09\/consumers-buckling-for-first-time-in-decade-former-walmart-us-ceo.html\" target=\"_blank\" rel=\"noopener\">told<\/a> CNBC\u200b in a recent interview\u200c that a series of\u200c factors\u2014political polarization, \u2063inflation,\u2064 and high interest rates\u2014were all working \u2064together to\u2062 undermine consumers \u200band\u200b their propensity to spend.<\/p>\n<\/div>\n<p>\u201cThat sort of pileup wears on the consumer and \u200bmakes them wary,\u201d Mr. Simon told the outlet. \u201cFor the \u2064first time in a long time, there\u2019s a reason \u2064for the consumer to pause.\u201d<\/p>\n<\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/world\/basic-groceries-up-20-to-95-percent-amid-cost-of-living-crisis-research-5490007?ea_src=author_manual&#038;ea_med=related_stories\"><br \/>\n<h3>Basic Groceries Up 20 to \u200d95 Percent Amid Cost of Living Crisis: Research<\/h3>\n<p><\/a><\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/us\/how-much-it-costs-to-struggle-real-cost-of-living-in-california-5476277?ea_src=author_manual&#038;ea_med=related_stories\"><br \/>\n<h3>\u2018How Much It Costs to Struggle&#8217;: Real Cost\u200d of Living in\u2064 California<\/h3>\n<p><\/a><\/li>\n<\/ul>\n<p>Consumer spending\u2062 is \u2064a\u200b major driver of the\u200b U.S. economy, accounting for roughly two-thirds of gross domestic product (GDP).<\/p>\n<p>Mr. Simon,\u200d who\u2063 now\u2063 serves\u200c on the \u200cBoard of Directors for Darden Restaurants and Hanesbrands Inc., said that, after a long period \u200bof cheap money cut short by the Federal\u2062 Reserve&#8217;s rapid rate hikes in response to soaring inflation, consumers are\u2064 now \u200bbeginning to buckle.<\/p>\n<p>&#8220;Consumers had an\u2062 incredible 10-, 12-year run,&#8221; he told CNBC&#8217;s \u200d&#8221;Fast Money&#8221; program. &#8220;Markets were buoyant.\u2062 Interest \u200drates\u2062 were low.\u2063 Money was available.&#8221;<\/p>\n<h2>Inflation &#8216;Still\u200b Above\u2064 Comfort Levels&#8217;<\/h2>\n<div class=\"my-5\">\n<p>Despite all the monetary tightening \u200bso far, inflation remains\u200c uncomfortably high.<\/p>\n<p>The government\u2064 released the latest data \u200bon inflation on \u2062Thursday, showing that the Consumer \u200cPrice\u2063 Index (CPI)\u200d rose 3.7 percent\u200d in September, matching August&#8217;s\u200c pace.\u200b While that&#8217;s down from a recent peak\u200c of 9.1 percent\u2062 in June 2022 and lower than the 8.2 percent \u200dpace a year ago, it&#8217;s still well above the\u2062 Fed&#8217;s inflation target of \u20632 \u200cpercent.<\/p>\n<p>Even though a number of\u2062 Fed officials\u200c have, in recent days, \u200dsuggested \u200cthat the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/feds-powell-says-economic-growth-will-likely-slow-as-de-globalization-pressures-build\/\" title=\"Fed's Powell Says Economic Growth Will Likely Slow as De-Globalization Pressures Build\">rate-hiking cycle<\/a> may have reached\u2064 its peak, <a href=\"https:\/\/www.theepochtimes.com\/article\/fed-minutes-show-one-more-rate-hike-then-higher-interest-rates-for-some-time-5508489\" target=\"_blank\" rel=\"noopener\">newly released minutes<\/a> detailing internal discussions\u200b during the \u200dFed&#8217;s latest rate-setting policy meeting in September show most of them think one more rate \u2063increase is in \u200cstore\u2014followed \u200cby a period of higher interest rates for \u200c&#8221;some time.&#8221;<\/p>\n<\/div>\n<p>The higher-for<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ex-walmart-ceo-says-us-consumers-reaching-breaking-point\/\" title=\"Former Walmart CEO warns that American consumers are nearing their limit.\">-longer\u200c interest rate environment means tighter \u2063financial conditions<\/a>, marked by more expensive \u2064borrowing and \u200creduced lending, putting\u200b a damper on economic activity. It \u200dalso tends to mean less consumer \u2064spending.<\/p>\n<h2>Waning Consumer Strength?<\/h2>\n<div class=\"my-5\">\n<p>With persistently \u200dhigh inflation and a deteriorating economic outlook, September saw \u2064consumer \u200dconfidence fall for\u2063 the second consecutive month \u2064to hit a four-month low, \u200c <a href=\"https:\/\/www.conference-board.org\/topics\/consumer-confidence\" target=\"_blank\" rel=\"noopener\">according to<\/a> the Conference Board.<\/p>\n<p>Also, expectations about the economic outlook over the\u2064 next six\u2063 months dropped below the Conference Board&#8217;s recession threshold of 80, reflecting waning confidence about \u2064business conditions, job availability,\u2064 and \u2064earnings.<\/p>\n<\/div>\n<p>&#8220;Write-in responses\u2063 showed that consumers continued\u2063 to be preoccupied \u200bwith \u2063rising prices in general, and\u2062 for\u200b groceries and gasoline in particular. Consumers also expressed \u2063concerns about \u2064the political situation and higher interest\u200b rates,&#8221; Dana Peterson, chief economist at the Conference Board, said in a statement.<\/p>\n<div class=\"my-5\">\n<p>All that consumer worry is likely to translate into reduced spending if\u2062 it hasn&#8217;t\u200b already. The latest consumer spending <a href=\"https:\/\/www.bea.gov\/news\/2023\/personal-income-and-outlays-august-2023\" target=\"_blank\" rel=\"noopener\">data is for August<\/a>, and it \u200cshows \u2063personal consumption expenditures (PCE)\u200c growing\u200d 0.4\u2063 percent that month, less\u200b than half \u2064of July&#8217;s pace of 0.9 percent.<\/p>\n<\/div>\n<p>A recent survey carried out in September by CNBC-Morning Consult found that 92 percent of U.S. adults have cut back\u200b on spending over \u2062the past six months.<\/p>\n<p>Looking forward, over three-quarters of \u2062those polled said\u2062 they plan \u2063to cut back on spending for non-essential\u2064 items.<\/p>\n<div class=\"my-5\">\n<p>Further,\u200b a\u2063 recent <a href=\"https:\/\/www.newyorkfed.org\/microeconomics\/sce#\/spendexp-1\" target=\"_blank\" rel=\"noopener\">survey of consumer\u200b expectations<\/a> from the New York Federal Reserve shows that more U.S. households\u2064 report\u2064 being financially worse off now than they were a year \u200cago.<\/p>\n<\/div>\n<p>Forty-one percent \u200bof households say they&#8217;re financially worse off than\u2062 a\u200c year ago,\u200c up from 40 percent in August.<\/p>\n<p>Unsurprisingly, \u200dgiven \u200cthe Fed&#8217;s\u200c series of \u2063aggressive \u2064rate hikes \u200dand \u2064speculation that more could \u2064be in store, households&#8217; perceptions \u2062of and expectations for credit conditions deteriorated.<\/p>\n<p>The survey also gauged consumer\u2063 spending intentions one year ahead. While these\u200b remained\u2063 unchanged in September at\u200b 5.3 percent, they generally\u200b fell steadily \u200cfrom a peak of 9.0 percent in May 2022.<\/p>\n<p>A number of large retailers, such as Target, have reported a drop in discretionary \u200dspending.<\/p>\n<div class=\"my-5\">\n<p>\u201cThere is some real concern about weakness\u200d in \u200bthe consumer,\u201d Sarah Hunt, a partner at Alpine Saxon Woods, told\u2062 Bloomberg TV <a href=\"https:\/\/www.bloomberg.com\/news\/videos\/2023-09-25\/there-s-a-real-consumer-spending-issue-sarah-hunt-video\" target=\"_blank\" rel=\"noopener\">in an \u2062interview<\/a> at\u2063 the end of September.<\/p>\n<\/div>\n<p>\u201cThere\u2019s a\u2064 real spending \u200bissue coming up and I think\u200c that\u2019s going to impact earnings.\u201d<\/p>\n<p> <\/p>\n<h2> How \u2063does the decline in consumer \u200bspending in August affect the U.S. economy\u200c and businesses, and \u200dwhat measures can be taken \u200bto\u2063 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-the-government-is-distorting-the-housing-market\/\" title=\"How The Government Is Distorting The Housing Market\">stimulate economic activity<\/a><\/h2>\n<p><span>  Nding data\u200b from the U.S. Department \u200bof Commerce showed a 1.7 percent decline in August, \u2062the\u200c largest drop in \u200cconsumer \u2062spending in almost a year. This decline\u200c comes after several months \u200bof strong consumer spending\u200d growth, highlighting a potential shift in consumer behavior.<\/p>\n<p>Mr. Simon believes that the current state of political polarization in\u200b the country is adding to consumer uncertainty.\u200d With the deep divides in the nation, \u200bconsumers may be hesitant to make large purchases or invest in the economy. Additionally, rising inflation and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-fresh-data-signals-us-economy-facing-stagnation\/\" title=\"New data suggests US economy stuck in 'stagnation'.\">high\u2064 interest rates<\/a> are taking a toll on consumers&#8217; wallets, making them more cautious about their spending habits.<\/p>\n<p>The \u2064impact of inflation on consumer confidence cannot be underestimated.\u2064 Even though the rate of\u2063 inflation has slightly decreased from previous \u2064months, it remains above the Federal Reserve&#8217;s target. This sustained high level\u200b of inflation erodes consumers&#8217; \u200cpurchasing power and puts pressure on their\u2064 budgets, ultimately leading to reduced spending.<\/p>\n<p>Furthermore, the recent minutes from the Federal\u2063 Reserve&#8217;s rate-setting policy meeting indicate that there may \u200cbe further rate hikes and\u2062 higher interest rates in\u2062 the near future. \u2063This\u200b anticipation of <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/another-inflation-metric-likely-heading-even-higher\/\" title=\"Another Inflation Metric Likely Heading Even Higher\">tighter financial conditions<\/a> further deters consumers from spending as they may opt to save or pay\u200c down debt instead.<\/p>\n<p>The Conference Board&#8217;s data on consumer confidence reflects this growing concern among consumers. With decreasing confidence in the economic outlook, consumers are less optimistic about business conditions, job availability, and\u2064 their own\u200d earnings. Rising prices, especially for essentials like groceries \u200dand gasoline, \u2064along \u200cwith worries about the political situation, further contribute to this erosion of consumer confidence.<\/p>\n<p>The decline in consumer spending in August \u2063is a clear indication that consumers are becoming\u200b more cautious. While it is too \u200bearly to determine \u200cwhether this\u2062 is a\u200b long-term trend or a temporary setback,\u2063 the factors highlighted by Mr. Simon suggest that consumers are on the verge \u2063of folding. Their propensity \u200bto spend and contribute to the economy may continue to decline \u200dif these\u200b challenges persist.<\/p>\n<p>This shift in consumer behavior has significant implications for the U.S. economy. Consumer spending\u2062 is a \u200cmajor driver\u2064 of GDP, and a decrease in \u200cspending can lead to slower economic growth. Businesses may also be affected as reduced consumer spending impacts their revenue and bottom line.\u2062 Government policymakers and economists will\u2064 need to closely \u200cmonitor these trends and take appropriate measures to support consumer confidence and stimulate economic activity.<\/p>\n<p>In conclusion, \u2062former Walmart \u200dCEO Bill Simon&#8217;s warning about \u2063the American consumer&#8217;s vulnerability is a concerning development for the U.S. economy. A combination\u2064 of political polarization, inflation, and\u2064 high interest\u2063 rates threaten\u2063 to \u200bundermine consumers&#8217; willingness to spend and contribute to economic growth. As consumer confidence wanes and spending declines,\u200c it becomes crucial for\u200d policymakers and businesses to address these challenges and find ways to support\u200d and \u200dstrengthen the American \u200bconsumer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US consumer, crucial for the economy, is close to collapsing, warns ex-Walmart CEO Bill Simon. He cites political division, inflation, and soaring interest rates as factors eroding consumer confidence and spending. These combined challenges are undermining consumers and their willingness to make purchases, potentially leading to a breaking point.<\/p>\n","protected":false},"author":118,"featured_media":2065840,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2065839","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2065839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/118"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2065839"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2065839\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2065840"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2065839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2065839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2065839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}