US consumers showed signs of fatigue leading up to the longest government shutdown, and their outlook has worsened ever since, sending a note of caution heading into the holiday-shopping season.
Retail sales, not adjusted for inflation, rose a tame 0.2% in September after several months of more robust spending, according to data released Tuesday. A more current report from the Conference Board showed consumer sentiment slid to the lowest in seven months, reflecting anxiety about the labor market and the economy.
“It’s a picture of consumption — which has been a real engine of growth over the last few years — slowing quite a lot into the end of this year,” said Oliver Allen, senior US economist at Pantheon Macroeconomics.
Recent corporate earnings show consumers have pulled back on some big-ticket items and are seeking bargains. But retailers like Kohl’s Corp., which joined Best Buy Co., Abercrombie & Fitch Co. and Dick’s Sporting Goods Inc. in raising its forecast on Tuesday, suggest that despite their anxiety about the economy, shoppers are still willing to spend on brands they recognize and trust.
At Best Buy, demand during back-to-school shopping and an October sale was better than analysts forecast. That performance has led executives to predict that Black Friday will be stronger than in past years, Chief Executive Officer Corie Barry told journalists on a call. She said the electronics retailer is expecting a “very strong Cyber Monday.”
