Former Toys R Us CEO Gerald Storch claims there are many warning signs about how consumers spend their money.
Former Toys R Us CEO Gerald Storch argued Tuesday that consumers are at an “inflection point” from the “post-pandemic euphoria” in which people were excited to travel and do other things. .
Speaking at “Cavuto: Coast to Coast,” Storch argued that consumers were “starting to have post-summer headaches” against the backdrop of inflation.
The business leader also warned that there are many “warning signs” that are noticeable in the way consumers are spending their money. He pointed out that more and more people are spending money on necessities rather than on discretionary items such as apparel and electronics.
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“We say consumer sales are up. They’re up, but they’re up for food,” he said.
“Department stores are a real disaster…you don’t want to sell apparel these days.”
Storch provided the insight on the heels of a stronger-than-expected recovery in US consumer confidence in August after falling for three straight months.
The Conference Board said on Tuesday that the consumer confidence index rose to 103.2 this month from 95.3 in July, beating economists’ expectations, Reuters reported.
Earlier this month, US consumer sentiment rose more than expected in August as gas prices fell across the country, but American confidence in the economy remains near record lows. is.
US consumer confidence rebounded better than expected in August after three straight months of decline. (David Paul Morris/Getty Images/Getty Images via Bloomberg)
The University of Michigan Consumer Confidence Index rose to 55.1 in August, up from 51.5 in July and beating economists’ expectations of 52.5. This is his 21% drop from just one year ago when the gauge was 70.3.
The data comes after the Labor Department reported that the consumer price index, a broad measure of prices for everyday items including gasoline, food and rent, rose 8.5% year-on-year in July, down from 9.1% in the same period last year. announced a day later. The surge recorded in June. It remained flat for a month from June.
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These figures are below both the 8.7% headline figure and the 0.2% monthly profit forecast by Refinitiv economists, and are welcome for the Fed as it seeks to contain price rises and keep consumer demand in check. It may be a symptom.
Storch told host Neil Cavout that he was “really worried” about the future.
“I don’t think we’re taking the right steps to deal with inflation and the economy,” he said, arguing that he doesn’t think the Fed’s rate hikes are the way to deal with the problem.
“It’s a single-minded solution to a big problem that ultimately only puts stakes in the hearts and minds of American consumers,” Storch said.
Fox News contributor Jonas Max Ferris joined “Kennedy” to look at inflation and what the Federal Reserve would do next to bring it down.
Federal Reserve Chairman Jerome Powell delivered a tough message about the state of the US economy at the annual central bank meeting in Wyoming on Friday. Nationwide.
Powell stressed that the Fed is not in a position to “stop or pause” despite four consecutive rate hikes, including two consecutive 75 basis point hikes. next year.
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Powell’s comments show that the Fed remains determined to fight inflation and slowing consumer demand, even if it means failing to achieve the elusive soft landing and triggering a recession. confirmed.
Megan Henney of FOX Business contributed to this report.
