- Despite inflation, Americans still spend a lot on restaurants, hotels, and airlines.
- However, economists and corporations believe that a slowdown will soon occur.
- It could come before year end, leading to lower spending — and fewer presents — this holiday season.
Although Americans still spend a lot, experts say the party is nearly over. The question is, when?
Caesars, the casino operator, will open its doors Tuesday. EightLas Vegas casino resorts said that October’s earnings were the strongest in the history Las Vegas.
Although a recessionCaesars may be seeing signs of one, but it isn’t yet.
CEO Tom Reeg stated that he cannot point to any part of his business in Vegas or elsewhere that would indicate a slowdown in consumer demand.
It’s not only on the Vegas strip that consumers continue to spend a lot.
Both will be available in October AmericanAnd Southwest AirlinesIn the third quarter, their companies reported record operating revenues. Southwest CEO Bob Jordan said that September saw record consumer travel, despite the “record summer leisure demand.” .
The restaurant industry is a very competitive one. McDonald’sAnd Chipotle both released earnings last month that beat expectations, saying they have seen Minimal resistanceCustomers to higher prices
Airbnb reported Tuesday its highest quarterly revenue yet at Nearly $3 billionThis is driven by longer stays and more bookings. Cedar Fair is the parent company for Cedar Point in Ohio. Also reportedThis week saw record quarterly revenues
Overall, US consumer spending is strong The increase was 0.6%Commerce Department stated that September saw a rise in inflation than was anticipated at 0.4%
Christopher Rupkey chief economist at FWDBONDS said that while Americans may be worried about inflation, they still shop, which keeps the economy growing for another quarter. Reuters.
This growth is illustrated in last week’s GDP growthFederal Reserve offers 2.6% as one of the reasons. Rates of interest have been raised again Wednesday. The economy is still hot despite previous rate increases. High inflationMore than 10,000,000 Openings for jobs.
Brian Moynihan CEO of Bank of America said, “If you raise rates but slow down the economy in order to fight inflation then the expectation is that you will have a slowdown of consumer spend.” This week. “It hasn’t yet happened.”
Despite the fact that spending is still high and employment numbers are high, economistsAnd Chief Executive OfficersMany predict a recession within the next 12 months. Americans are a nation of stuttering Americans Reduce your savingsStart to You can rely on us moreCompanies can get credit card debt relief from the government BeginningSignal that consumers care SoonYou may reach breaking point. It remains to be seen if Americans will buckle or persevere through the holiday season.
“This spending is driven a unsustainable drawdown in the savings rate and over-reliance upon credit,” Wells Fargo Senior Economist Tim Quinlan said. USA TodayThis suggests that America’s time is running out.
The party is expected to end in the next few months, according to corporations
Despite reporting Record revenuesApple executives are expected to report results for the third quarter They expect Mac sales to decline substantially in the fourth quarter, compared to the previous year, and project a slowdown in overall sales growth.
Amazon isn’t expecting to be immune. Its stock price 11% decreaseIt forecast the following Friday slowest holiday sales growthIn the company’s past, consumers confronted with inflation start to cut back.
This could lead to fewer gifts this holiday season due to the slowdown. According to a Deloitte survey, nearly 5,000 Americans are not satisfied with their holiday gifts. Found that Americans plan to buy 44% fewer gifts — an average of nine versus 16 last year.
However, it is possible to have one last spending hurrah.
Gallup’s recent poll found that over 1,000 adults in America are satisfied with the Gallup survey This is what we foundConsumers expect to spend $932 on gifts over the next month, up from $837 in 2021. This is close to the $942 recorded for 2019, which was the highest survey ever.
Experts predict that Americans will be less likely to spend in the New Year if they accept higher inflation.
Tuan Nguyen, RSM economist, said that spending should decrease significantly as holiday hangovers and savings continue to shrink. USA Today.
