• Consumer Confidence Drops, Retail Stocks Slide on Walmart Warning, New Home Sales Fall, Office Atten

    Consumer Confidence Drops

    A widely watched index gauging consumer confidence declined for the third consecutive month in July amid concerns about a pending recession.

    The New York-based Conference Board, which researches economic trends, said Tuesday its Consumer Confidence Index was 95.7, down 2.7 points from the June figure. The index tracks changes in positive responses to a nationwide survey regarding consumers’ overall outlooks on the economy, using 1985 as a base of 100.

    “As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes and major appliances all pulled back further in July,” Lynn Franco, the Conference Board’s senior director of economic indicators, said in a statement Tuesday.

    The group’s index component gauging consumers’ assessment of business and labor market conditions fell to 141.3 in July from 147.2 in June. This signals nervousness among consumers, even as they view current conditions more favorably than they did in 1985.

    Retail Stocks Slide on Walmart Warning

    U.S. stocks ended the day lower Tuesday after Walmart warned late Monday that higher costs and unsold inventory would cut into second-quarter profits. The news sent the S&P 500 retail index down 4.2 percent as shares of Walmart, Target and Amazon all fell.

    “The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars," Walmart President and CEO Doug McMillon warned. "We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.”

    Price reductions by Walmart, the nation's largest retailer, could force competitors to drop prices as well. That could cut into profit margins even as it acts as a break on inflation, now at its highest level in 40 years. Walmart is set to report second-quarter results on Aug. 16.

    New Home Sales Decline

    July sales of new single-family homes declined 8.1% from the prior month and dropped 17.4% from July 2021, the Commerce Department reported Tuesday. This is the latest of several indicators pointing to a slowing home sales market amid rising interest rates over the past few months.

    Citing numbers that also came from the Department of Housing and Urban Development, Commerce officials said there were 590,000 new homes sold in July, down from June’s 642,000 and June 2021’s 714,000.

    The estimate of new houses still for sale at the end of June was 457,000, representing a supply of 9.3 months at the current sales rate and highest inventory level since May 2010.

    “It should be noted that a significant proportion of new homes for sale are not yet started,” Doug Duncan, Fannie Mae’s chief economist, said in a statement Tuesday that noted sales could remain slow for the rest of the year. “There are also anecdotal reports of an increase in contract cancellations, which are not a part of the data revisions.”

    Office Attendance Rises

    Big-city office attendance hit its highest level since the start of the pandemic, reaching a composite 44.7% for the week ended July 13, though most cities remain below 50% in weekly tracking by security technology firm Kastle Systems.

    The company’s 10-city Back to Work Barometer, using anonymous keycard data from clients’ properties to gauge office use as a percentage of pre-pandemic attendance, registered sixth-tenths of a point higher than in the previous week.

    Kastle researchers noted nine of 10 cities in the national barometer saw small to moderate increases from the prior week. The remaining city, Dallas, saw a decline of nearly 1% to 51% but still managed as usual to come in third for the week behind Austin at 59.1% and Houston at 55.1%. The next closest to the top three was Chicago at 43.1%.


    Source: www.CoStar.com