The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

Business

Pepsi and Delta say consumers are hunting for value

by admin July 12, 2024
July 12, 2024
Pepsi and Delta say consumers are hunting for value

Post-pandemic consumer splurging is rapidly coming to a halt, according to two widely followed U.S. companies — more evidence that the U.S. economy is likely in for a period of slower economic growth.

Pepsi and Delta Air Lines both offered subdued financial outlooks as they reported quarterly earnings Thursday, and both cited the same reason: Customers are now becoming more value conscious, after years of struggling with elevated costs.

‘The impacts of persistent inflationary pressures and higher borrowing costs over the last few years have resulted in tighter household financial conditions,’ Pepsi said Thursday in a statement.

As a result, the company said, consumers have become more price sensitive across its entire range of products.

Delta CEO Ed Bastian echoed the sentiment in explaining his company’s lower outlook for the rest of the year.

“What you see happening is the impact in the domestic marketplace to the lower fare discounting that’s been going on this quarter,” he told CNBC airline reporter Leslie Josephs.

In other words, Delta customers have started to push back on paying top-dollar to travel in the skies.

The stock price of both companies fell in early Thursday trading. A third consumer-focused company, Slim Jim-parent Conagra Brands, also reported lower earnings Thursday, and CEO Sean Connolly likewise said customers are becoming more cost conscious as they ‘adapt and establish new reference prices.”

The seemingly economy-wide bargain-hunting was further reflected Thursday in the latest official inflation data, which showed the monthly Consumer Price Index had meaningfully declined for the first time since the pandemic.

While the change in the 12-month index remained above the Federal Reserve’s 2% goal, at 3%, it cooled more than analysts’ expectations.

Thursday’s company announcements kick off several weeks of other big consumer companies giving business updates.

Even as consumers start budgeting more, economic forecasters say there is still no sign of a recession. While the labor market has begun to weaken, wage growth remains healthy — even surpassing the rate of inflation, but the pay increases are not excessive.

‘The labor market is normalizing, it isn’t seeing the type of weakness that could spark recessionary worries,’ Josh Jamner, Investment Strategy Analyst at ClearBridge Investments financial group, wrote in a note to clients. He added that unemployment claims data show that ‘a layoff cycle that could lead to a recession is not currently building.”

Economists say the goal is ‘disinflation,’ a situation where the economy downshifts without slipping into recession. It would mean slower price growth without a full-blown recession.

Gregory Daco, chief economist at EY (formerly Ernst & Young), sees that scenario currently playing out.

‘Softer consumer spending growth due to increased pricing sensitivity, reduced markups, moderating wage growth, and declining rent inflation will continue to provide a healthy disinflationary impulse,” Daco wrote in a note to clients Thursday.

This post appeared first on NBC NEWS

0
FacebookTwitterGoogle +Pinterest
previous post
He plays rich on screen, but dreams of full-time work: ‘Why can’t I get a living wage?’
next post
Hungary’s Orban ditches NATO summit to meet with Donald Trump

Related Posts

People are earning more from side gigs and...

July 11, 2024

Crash victims’ families prepare to make what could...

September 4, 2025

Citadel’s Ken Griffin buys a stegosaurus for $45...

July 19, 2024

SEC Chair Gary Gensler will step down Jan....

November 23, 2024

Columbia Sportswear sues Columbia University, alleging trademark infringement

August 5, 2025

How new professional sports leagues like SailGP are...

March 21, 2025

After success in Paris, Los Angeles looks to...

September 13, 2024

Target stock falls 21% as big discounting effort...

November 21, 2024

Workers earning up to $58K a year could...

April 26, 2024

Boeing did not retain security camera footage showing...

March 15, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Ben & Jerry’s co-founder resigns, claiming parent company Unilever ‘silenced’ its campaigning

      October 10, 2025
    • The Real Drivers of This Market: AI, Semis & Robotics

      October 10, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      October 10, 2025
    • Could Trump win the Nobel Peace Prize after Israel-Hamas deal?

      October 10, 2025
    • RFK Jr shocked over pregnant moms protesting Trump with Tylenol: ‘Pathological’

      October 10, 2025
    • Top insurance CEO in the hot seat after scathing ad campaign exposes China ties

      October 10, 2025

    Categories

    • Business (1,416)
    • Politics (4,700)
    • Stocks (1,699)
    • Uncategorized (45)
    • World News (1,409)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved