The US economy is dealing with a hit from the ongoing inflation storm. At the same time, the commercial, financial enterprises and the real estate sector are trying to brace for the impact of the recession. Under the current circumstances, Walmart and Target Corporation, the two biggest retail giants in the USA, are looking for a change of pace.

For the retail earning projections for the ongoing week, retailers have claimed that consumers have all the power to lead the market dynamics. If the consumers decide to turn up for shopping, the wheel of the economy can start turning faster once again. However, there is an equal chance of a decline in purchases citing the concerns among the consumers about economic conditions that will make savings a more lucrative option.

Gasoline Prices are Decreasing

The consumers may opt for refraining from spending a lot during the third quarter. However, a visible decline in the prices of gasoline is a contributing factor to providing some relief for lower-income households. At the same time, it is not possible to ignore the inflation hike highest in four decades. Additionally, Federal Reserve has continued its interest hike policies that can lead the economy into the heart of the recession.

Walmart and Target were unable to clear out their inventories during the first quarter. Consequently, the retailers have estimated a further decline in economic activity, citing that the interest of consumers is going to remain fixed on necessities such as food and fuel. Smead Capital Management CIO Bill Smead claimed that Target has already projected that several next quarters are going to be rough.

Retailers recently claimed that since shoppers are unable to spend money on things that are not very important for survival, the demand has declined. To this end, the consistent streak of price inflation for several goods and services has broken. CPI rose by 8.5% during July, following a 17% drop in gasoline prices.

Walmart has also issued a pessimistic projection for the upcoming weeks despite the holiday season and back-to-school period. The gloomy estimates of Walmart have created a panic among global merchants. Walmart has reportedly slashed prices to get rid of $60 billion worth of inventory buildup. Summit Global Investments CIO Dave Harden told the media that lower income and middle-to-higher income households are suffering, and it is affecting retail giants like Walmart in turn by removing shopping interest.