IS THE CONSUMER TAPPED OUT?
It sure seems that way, and that’s a bad sign for business. It looks like we’re in for much of the same until at least September when the Federal Reserve might lower its fund rate by at least one-quarter percent. Here’s what we’re seeing so far:
FED FUND RATE CUT IN SEPTEMBER?: Looking good. Last week the probability was 71%. Now: September Rate Cut Probability: 93% This will be the first time since March 16, 2020.
EFFECT OF LOWER RATES:
- INCREASED HOME SALES: Current homeowners don’t want to give up their low-cost mortgages, which will ease the pain and increase home sales.
- LOWER INTEREST RATES: This will enable you to offer lower financing for anything that you sell, resulting in more sales.
- LOWER BORROWING COSTS: We all have reasons for investing in our businesses and, therefore often the need for borrowing. Many have been putting it off, this helps.
PROOF CONSUMER IS PULLING BACK ON SPENDING:
- FAST FOOD CHAINS REACT: $3 $5 $7 Meal Deals. People don’t want to spend $10-$15 for lunch. We see it everywhere.
- CUTTING SPENDING ON SODA POP AND SNACKS: Pepsi and Frito-Lay just announced a slight revenue increase of 1.9% for Pepsi versus a 13% increase in the same period last year. Frito-Lay revenue declined 3% versus a 14% increase for the same period last year.
- HOME IMPROVEMENT EARNINGS OFF: Home Depot reported decreased US sales of 3.2% for the first quarter.
WHAT DOES THIS MEAN FOR US? We need to fight harder for a pie that is smaller than last year. This is accomplished with smart promotions on your part and increased advertising to land the sale. Look through our library of blogs for all sorts of ideas to assist you.
Onward & Upward!
Check out: https://detroitseocompany.com/blog/seo-facts/to-move-or-to-renovate-the-homeowner-dilemma/
