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

The Trader Harbor

World News

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
Rate cuts before the year’s end could make your next trip abroad more expensive
next post
He plays rich on screen but dreams of full-time work: ‘Why can’t I get a living wage?’

Related Posts

Jerome Powell asks inspector general to review Fed’s...

July 15, 2025

Fed minutes point to ‘likely’ rate cut coming...

August 23, 2024

Inside the $1 billion berry startup backed by...

April 24, 2025

Rare Michael Jordan, Kobe Bryant rookie jerseys expected...

March 7, 2025

Here’s why banks don’t want the CFPB to...

March 11, 2025

Macy’s says employee hid up to $154 million...

November 26, 2024

Temu halts shipping direct from China as de...

May 5, 2025

Three Disney films could top $1 billion this...

August 10, 2024

McDonald’s is working to introduce a $5 value...

May 11, 2024

Chinese tea chain Chagee files for U.S. initial...

March 28, 2025

    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

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

      July 21, 2025
    • What Musk’s fracture with Trump means for GOP’s future: ‘Beating heart of the Republican Party’

      July 21, 2025
    • Trump’s housing chief rips Powell for blowing millions on Fed facelift during housing crisis he perpetuates

      July 21, 2025
    • Trump celebrates 6 months back in office: US ‘totally revived’ after being ‘DEAD’ under Biden

      July 21, 2025
    • Biden admin spent hefty sum of US tax dollars to upgrade embassy swimming pools in Iraq, Russia

      July 21, 2025
    • Trump heads to Scotland, continues ironing out trade deals after notching six months back in office

      July 21, 2025

    Categories

    • Business (1,299)
    • Politics (4,040)
    • Stocks (1,535)
    • Uncategorized (45)
    • World News (1,292)
    • 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