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Some of the big US retailers cut their costs for the last quarter of the year as they reported lower profits than they estimated, while shoppers have had to put up with high inflation and constant increases in interest rates. by the Federal Reserve, something that would affect purchases during the December holidays in the country and could record lower profits for companies than those recorded in 2021.
Americans will need to weigh the cost-benefit of their December holiday purchases. The inflationary landscape and rumors of a recession have unleashed a series of effects on people’s behavior, from their trivial purchase decisions, to the homes they choose to live in.
Companies have also made drastic decisions. The amount of investment of many retailers was reduced for the last quarter of the year because they have not achieved their profit goals, other large companies have started to raise the salaries of their job offers to make vacancies more attractive and the sector of the housing has also suffered drastic price changes in the main cities of the country.
In an interview with France 24, Alejandro Chafuen, Forbes columnist and international managing director of the Acton Institute, explained what would lie ahead for the world’s leading economy.
“The economic outlook for the next three months is not simple, it is not easy and it is not going to affect everyone equally, in the United States and in Latin America. The Federal Reserve Bank started to raise interest rates and most importantly, started to decrease the rate of monetary expansion, even reduced it at the beginning of the year, but I don’t think that will have a very big effect on the US. because there is a kind of tendency, especially in these last three months of the year, to spend for the holidays, for Christmas.” Chafuen said during the interview.
In terms of unemployment, the US Bureau of Labor Statistics reported the lowest level of the jobless rate in half a century. It fell from 3.7% in August to 3.5% in September.
“In these months we are going to have an increase in gasoline and consumers see that and take it as a tax they are paying. As the interest rate is rising, it is going to slow down the construction of houses and that affects the entire construction sector and Latino workers, but it has not yet been dramatic,” explained Alejandro Chafuen.
The September report also showed the number of jobs in the United States. They were 236,000 in September, 52,000 less than those recorded in August, when 315,000 jobs were added. This would be the second consecutive fall and it helps the FED’s efforts to cool down the economy of the North American country; however, experts assure that the true reflection of the decisions of the US Central Bank will come after this last quarter, that is, results that will be reflected in 2023.
However, the excitement and sentiment of the holiday season may spur Americans to buy, after going through a year marked by the war in Ukraine, pressures due to the cost of gasoline and even large mobilizations of migrants from the south of the American continent to the north.
“The optimistic sentiment of consumers is not very high, it is quite a bit lower than it was at the beginning of the year, but these last two months it has picked up, (…) I do not expect something catastrophic, it is obvious that the cost of energy is rising for us domestic consumers and for industries and businesses and all of this is going to lead to an adjustment.” explained our guest.
“It’s not going to be a super quarter but I think the economy is going to be pretty flat, not growing much and I think the level of employment will be gradually recovering in these months.” she added.
With Reuters and local media.
