America Faces No Greater Threat Than Joe Biden and the Democrat Party. Their Assault to Our Borders Is As Great As Their Assault to Free Speech and Free Elections
Tuesday, May 17, 2022
BIDENOMICS - JOE'S TRICKLE UP ECONOMICS - THE RICH ARE GETTING RICHER AND ILLEGALS OUR JOBS TO KEEP WAGES DEPRESSED
Shares of Walmart crashed 11 percent on Tuesday after the company reported first-quarter results showing that its profits had plunged as the nation’s largest retailer grappled with surging inflation and supply chain disruptions.
The company also said it was cutting its forecast for full-year earnings, which it now expects to decline from last year.
The Bentonville, Arkansas-based retailer is often looked at as a bellwether for the U.S. economy and the health of the consumer due to its size and the breadth of its customer base. The U.S. economy has been powered along by high levels of consumer spending this year but the Walmart first quarter results show the drag inflation has on real economic growth.
Walmart’s sales rose 2.4 percent to $141.57 billion. That was better than the $138.8 billion that analysts had projected. But inflation ate away the profits.
Walmart said it had first-quarter earnings of $2.05 billion, or 74 cents per share. Adjusted earnings per share totaled $1.30, far short of the consensus forecast of $1.48 per share. A year ago, the company made $2.73 billion, or 97 cents per share, in the first quarter.
The company says it now expects full-year earnings to decline one percent. Just a few months ago, it said it was expecting mid-single digit growth.
“Bottom line results were unexpected and reflect the unusual environment,” said CEO Doug McMillon. “U.S. inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected.”
Inflation is changing the mix of consumer spending, Walmart executives said Tuesday. High prices are forcing some customers to choose generic, private-label brands over national brands, especially in lunch meats, Walmart executives said.
Sales at already existing U.S. stores rose 3 percent, much slower than the fourth quarter rise of 5.6 percent and the 9.2 percent increase in the third quarter. Online sales rose 1 percent, a big deceleration as people return to pre-pandemic in-store shopping.
The cost of food at home is up 9.4 percent compared with a year ago, according to the Consumer Price Index. That’s especially tough on Walmart, which is the largest grocery seller in the U.S.
—The Associated Press contributed to this report.
Bidenflation Crashes Homebuilder Sentiment to Lowest Level in Two Years
Confidence among home builders in the U.S. lurched downward as inflation took its toll and home affordability continued to plunge.
The National Association of Home Builders said that its housing market index, which measures the sentiment of builders of single-family homes, plunged eight points to a score of 69 in May, the lowest level since June of 2020.
This is the fifth straight month of deteriorating sentiment. Economists had predicted a milder notching down to 75 from 77. The NAHB said the plunge was a sign that the housing market is now slowing.
“Housing leads the business cycle and housing is slowing,” said NAHB Chairman Jerry Konter, a builder and developer from Savannah, Ga.
Home builders have been hit by inflation in the costs of building materials, shortages of some materials, a tight labor market, and rising interest rates making homes less affordable to buyers.
“The housing market is facing growing challenges,” said NAHB Chief Economist Robert Dietz. “Building material costs are up 19 percent from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50 percent of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates.”
All three components of the index declined. The index measuring traffic of prospective buyers fell nine points to 52. The index measuring current sales conditions dropped eight points to 78. The gauge of sales expectations six months from now crashed 10 points to 63.
Mortgage rates have moved sharply higher this year as the Fed tightens monetary policy in an effort to bring inflation back under control. The average rate of the 30-year fixed rate mortgage started the year at 3.29 percent and was up to 5.55 percent at the start of May. A record share of Americans say now is not a good time to buy a home. According to a Gallup poll taken in April, just 30 percent of Americans say now is a good time to buy a home, down 23 points from a year ago and the first time the share has dropped below 50 percent since Gallup began polling the question in 1978.
The decline in sentiment among home builders matches the sharp drop in consumer sentiment in May. The University of Michigan’s index of consumer sentiment plunged 9.4 percent in the early weeks of May, falling from a score of 65.2 to 59.1. That kind of plunge is rare outside of a catastrophe or a recession. It is the lowest reading since the summer of 2011 when the country was locked in a battle over the debt ceiling and Standard & Poor’s downgraded the credit rating of the United States.
“Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36 percent of consumers attributing their negative assessment to inflation,” said Joanne Hsu, the director of the consumer survey. “Buying conditions for durables reached its lowest reading since the question began appearing on the monthly surveys in 1978, again primarily due to high prices.”
On Monday, the Federal Reserve Bank of New York’s “Empire State” manufacturing index unexpectedly plunged into contractionary territory. New Orders and shipments were down sharply. Shipments fell at the “fastest pace since early in the pandemic,” the New York Fed said.
Better than expected retail sales for April were reported Tuesday morning, although the increase in spending is a reflection of rising prices rather than consumers purchasing additional items. The higher than expected sales numbers are a sign that inflationary pressures remain persistent.
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