CONSUMERS TURN CAUTIOUS AS TARIFFS BITE
Affordability issues have mounted, influencing voter sentiment and contributing to Democratic beneficial properties in off-year state elections in New Jersey, New York and Virginia. The White Home has since widened tariff exemptions for a number of agricultural items in response to cost-of-living pressures.
Navy Federal Credit score Union chief economist Heather Lengthy famous “muted progress” in retail gross sales and sharper month-to-month drops in tariff-sensitive classes together with auto components, electronics, home equipment, sporting items and musical devices.
“American shoppers are in value-hunting mode,” Lengthy stated. “They’re spending extra on the fundamentals and being additional picky with the place they spend their discretionary {dollars}.”
There are additionally widening spending gaps between earnings teams. Whereas wealthier households proceed to spend, “middle- and lower-income households are turning extra cautious heading into the vacation season,” stated EY-Parthenon senior economist Lydia Boussour, citing stress from a weakening jobs market.
