- While the costs continued to increase in FebruaryProfit grew even more, raising the speed of savings and showing great care among Americans. As the growth slows down, some businesses reduce their profits against the background of consumer behavior problems.
As the confidence in economic forecasts disappears, consumers slow down their expenses, and businesses reduce their profits.
Personal income last month jumped by 0.8%, and the costs increased by 0.4%, which contributes to the increase in savings to 4.6%. This is the highest since June 2024, and signal buyers are becoming more careful.
“Costs in February confirm the slowdown in consumer activity in the first quarter of 2025,” – Comerica Bank’s chief economist Bill Adams said in a note.
The weak January costs can indicate “disposable dragged” from the LA and the Hard weather conditions, “but the anemic rebound of February indicates a more persistent attraction,” he added.
At the same time, consumer confidence is immersed, although the moods are not transferred to actual costs.
The conference council expectations index in the last survey of consumers decreased to a 12-year minimum. Index plunged up to 65.2 that “much below the threshold 80, which usually signals about recession ahead“
In addition, a survey of Michigan’s consumers in Michigan passed 11%this week.
“The decrease in this month reflects the obvious consensus in all demographic and political affiliations,” said the poll director Joanna of the CHSO. “Republicans have joined the independent and Democrats, extending expectations since February for their personal finances, business conditions, unemployment and inflation.”
As consumers get tired of economic winds, companies in various fields feel heat.
Some reduce profits and others remain on the clock, as tariffs, inflation and consumer behavior affect their business.
Federation He lowered his forecast for a full year for adjusted profit to $ 18-18.60 per share from $ 19 to $ 20, which has already decreased compared to the December 20-22 forecast.
During his quarterly Call profitFinancial director John Dietrich attributed the lower forecast “permanent problems in the world industrial economy, inflation and uncertainty related to global trade policy.”
Delta Air Lines Also, in the first quarter, she reduced her profits for profits, waiting for a profit between 30 cents and 50 cents per share, compared to previous estimates between $ 70 and $ 1 in January.
According to A a AR Submission of Adjustment in MarchDelta said its dim guide was due to less confidence in consumer and corporate, caused by an increase in economic uncertainty, consuming domestic demand.
“Consumers in the discrence business do not like uncertainty,” said Delta CEO Ed Bastian Cnbc. “Although we believe it will be the period we pass, it is also what we need to understand and get to more peaceful waters.”
In addition, in March, American Airlines reduced their growth forecasts after weak demand in their home leisure segment and continued to fall out of the plane crash across the flow of the flow. The company expects that the revenues in the first quarter will be smoothed over year since the previous forecast is 3% to 5%.
“Tariffs”
Elsewhere, other companies provide disappointing recommendations. Lullemon See the low moods of consumers that are “detected” in slower traffic. The company designs profit in the first quarter of $ 2.34 billion, which is lower than the street expectations of $ 2.39 billion.
The company conducted a survey with IPSOs earlier this month regarding consumer sentiment and found that “consumers are less spending with -reinforcement of concerns and economics.”
Megan Frank’s financial director said he was called that “tariff winds” could lead to slow sales in 2025. This year’s management sees a $ 11.1 billion revenue-11.3 billion, which is modestly compared to $ 10.59 billion in 2024, but also below Analysts’ expectations for 11.31 billion dollars.
Retail gay Walmart The proposed prediction for a full year of $ 2.50 to $ 2.60 per share, there is not enough projection of $ 2.76 per share of $ 2.76 per share.
McMilo CEO also warned of consumers’ confidence on February 27 talk at the Chicago Economic Club. He noted that customers “press the budget” reduce their expenses and show “tense behavior”.
American Eagle said it was affected by the slowdown and estimated the economic blow from the tariffs for China by $ 5 million-10 million for its financial year.
Director -General Jay Shattentein said “the fear of the unknown” promotes “less reliable demand”.
“Not only tariffs, not just inflation, we see that the government cut off people,” he added. “They don’t know how it will affect them.”
Originally this story was presented on Fortune.com
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2025-03-30 20:31:00
Stuart Dyos
