FT News Briefing cover image

FT News Briefing

US consumers start pinching pennies

Aug 9, 2024
The stock market's recent sell-off may have been an overreaction, while consumers are tightening their belts amidst falling spending. As financial pressures rise, especially for lower-income households, companies are adjusting their strategies. Additionally, Ukraine's surprising counteroffensive in Russia on the battlefield indicates shifting dynamics in the ongoing conflict, which could impact future negotiations. Political commentary also highlights the tension surrounding the Federal Reserve and the presidential race.
11:28

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Quick takeaways

  • U.S. consumer spending is declining due to financial pressures from rising costs and expensive borrowing, impacting corporate earnings severely.
  • Ukraine's surprise counteroffensive in Russia has allowed it to regain significant territory, potentially enhancing its negotiation position amid ongoing conflict.

Deep dives

Consumer Spending Decline

Recent data indicates a decline in U.S. consumer spending, which is impacting corporate earnings negatively. Companies like Disney have reported lower operating profits, highlighting that their usual customer turnout at theme parks is waning. Additionally, fast food chains like McDonald's are introducing budget meal deals to attract cost-conscious diners, signaling a shift in consumer behavior. This trend suggests that many households, particularly those with lower incomes, are feeling financial pressures due to rising costs and are becoming more reluctant to spend.

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