Not a great sign on the economy from one of the nation's largest retailers:
Americans are putting off major upgrades to their homes as they await lower interest rates and amid ongoing unease about the U.S. economy, Home Depot said Tuesday. The company lowered its sales expectations for the year, blaming weaker consumer spending.
The company now forecasts 2024 sales at its locations open at least a year to fall between 3% and 4%. Its prior outlook called for a drop of roughly 1%.
Bad! Not good!
A 4% drop is pretty stinking big, especially for a business that's something of a bellwether for the economy. When people start to pump the brakes on home improvements, you can assume that retail and services are probably poised to take a big hit.
In fact, it looks like that's what's happening here: "Home Depot joins other major corporations that have cautioned about a pullback in consumer spending, with the likes of McDonald's and Starbucks also reporting inflation-weary Americans are getting choosier in where they spend their dollars."
Company CEO Tim Decker said high interest rates and potential economic chaos are both driving the shift, as well as a tumultuous spring weather season:
‘During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,' Decker said in a news release.
On an analyst call, Decker added, ‘Additionally, we saw continued softness in spring projects, which were also impacted by the extreme weather changes throughout the quarter.'
If and when the you-know-what hits the you-know-what, just don't forget who was in charge these last four years!
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