They’ll also be watching this week for the success of “Black Friday” which has traditionally kicked off the holiday shopping season. Typically, stores see big jumps in sales, but with inflation remaining high and some retailers reporting slowing sales, this weekend will be closely watched. If consumers don’t decide to spend as much, it will raise concerns that the economy is struggling and might be headed for a recession. That’s because roughly 70% of the U.S. economy is derived from consumer spending. If shoppers buy less, then the economy slows. While retail sales have remained strong throughout the last couple of years (and even rose 1.3% in the month of October) several retailers have issued warnings during their quarterly earnings that they were seeing demand start to wane. Predictions of a gloomy holiday shopping season could be a boon to those who can still afford to shop. Retailers are expected to offer record discounts this year to lure shoppers in. Stocks are losing ground today as investors consider the latest in earnings reports and mull over the hawkish (meaning, in favor of rate hikes) tone many Fed officials struck last week.
- Kristin
