Corporations on Front Lines of Economy Say it’s Starting to Fail

By: Alex Yang

In recent days, many executives from the largest tech, retail, and consumer product companies have all tried to address inquiries on the state of the economy, which could be on the brink of a recession. The picture is mixed; while there is still strong consumer spending, it is beginning to wane.

In Silicon Valley, companies like Google and Apple generally have higher gains than the norm, but executives have stated that there has been some slowing in consumer spending. Company Procter & Gamble said it’s expecting a harder 2023, and Mastercard said that spending was steady among the wealthy, while it’s slowing down from lower-income customers.

Companies’ earnings are showing that the US economy is in a strange spot right now. This shows that people are still spending money, but more of it is going to gas and necessities and less to categories like electronics.

“As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened,” Best Buy executive Corie Barry said. Hinting that Americans are beginning to think more carefully about what to spend their money on.

Apple items like watches and home devices also posted lower sales, and this is a large problem because Apple’s customers are usually people with mid to high-level income. “The main message is if Apple does start to feel the softness that means really bad news for everybody else,” she said. “That would mean the rest of the market would contract more.”

Many companies have also stopped hiring as much. Unemployment isn’t “high” yet, but employment is definitely slowing down, and some companies are straight up firing people. For example, Shopify has stated that it would fire 10 percent of its workforce.

This problem could be a recession on the horizon, and some people are calling it the new normal, but this is a huge problem for the economy. But most people can do nothing but adjust to these new circumstances.