After beginning the year in a buying mood, Americans slowed their spending in February on gadgets, home furnishings and other discretionary items as higher prices for food, gasoline, and shelter are taking a bigger bite of their wallet.
FILE - Judy Gallagher, left, wears a mask as she looks through music at the Ernest Tubb Record Shop Monday, June 29, 2020, in Nashville, Tenn. The Nashville record store that was opened by Opry legend Ernest Tubb in 1947 will close as the building is being put up for sale. Owners announced on Friday that the shop on Broadway will close in the spring after being in its current location since 1951, citing circumstances beyond our control.
Business at furniture and home furnishing stores fell 1% in February, while sales at consumer electronics and appliance stores slipped 0.6%. General merchandise stores saw business down 0.2%, while online sales fell 3.7%. Restaurant sales rose 2.5% as shoppers shift more of their spending to services as the threat of COVID-19 fades.And there are new pressures that could send prices even higher, namely the Russian invasion of Ukraine.
“The problem is that as households get more and more squeezed on essentials, there is less budget available for discretionary spending,” said Neil Saunders, managing director at GlobalData Retail. “True, there is an elevated buffer of savings which consumers can call upon to fund their consumption, but this is a short-term fix in an environment where inflation is becoming a persistent problem.
Employers added a robust 678,000 jobs in February, the largest monthly total since July, the Labor Department reported earlier this month. The unemployment rate dropped to 3.8% from 4% in January, extending a sharp decline in joblessness to its lowest level since before the pandemic erupted two years ago.In fact, Walmart announced on Wednesday it plans to hire more than 50,000 U.S. workers during its current fiscal quarter to a variety of stores, clubs, supply chain and corporate tech roles.