By: Cedric Wu

Corporate giants including Google and Apple have been noticing a decrease in consumer spending showing signs of an economic recession.

Walmart and Best Buy believe that the decrease in consumer spending is in direct correlation with a change in consumer habits. These consumer habit changes are mostly due to inflation, which has caused customers to focus on gas and other necessities instead of clothes and electronics.

“As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened,” says Corry Barry, the chief executive of Best Buy.

Thomas Combs, a 52-year-old business owner says he has “completely changed” the way that he spends his money. He has cut back on extraneous items such as gourmet coffee and ice cream, instead saving it or spending it on necessary things.

Consumer spending isn’t all negative however. Stock for large tech companies like Microsoft rose after their earnings reports came out. The growth along with the extreme increase in gas and oil stock made the S&P 500, a collection of large stocks, have its best month since November 2020.

“People were nervous there was some sort of bombshell lurking, and it never showed,” Said Tom Essaye, president of Sevens Report Research, a financial research firm. “For now, we sort of dodged a bullet.”

But this doesn’t mean that the Economy is safe. Chief executive of Apple, Tim Cook, reported that Apple accessories like the Apple watch were lower in sales due to supply issues.

The mixed trend of negative and positive income also applies to other companies. Pfizer has increased in profit off their covid-19 vaccine and Southwest Airlines reported that demand for their flights was still strong.

UPS was less fortunate however, as their shares dropped after a miscalculation in expected delivery amounts. General Motors’s shares also decreased due to a decrease in sales.

Many Americans are choosing to adapt to the new economic climate, seeing it as a permanent change. 32-year-old Amazon worker Shannon Villa believes that carefully acknowledging your spending and focusing on necessities is extremely important.

“I can’t control the price of eggs or milk. [If] it goes up it just goes up. I still need it for family,” said Villa. “Gas goes up, I still need it. I can’t afford to complain. I just got to adjust.”

Link to article: https://www.washingtonpost.com/technology/2022/07/30/earnings-econ-recession/