Consumers can no longer afford Target. Here comes dumpster diving.

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In a dramatic turn of events, Target’s stock took a nosedive, falling 8% after the retail giant reported weaker-than-expected earnings and a concerning 3% decline in revenue. The figures are a stark indicator of a broader consumer spending crisis that has gripped the nation.

Target’s CEO, in a candid admission, revealed that the decline reflects “continued soft trends in discretionary categories.” The impact was palpable as store traffic dropped by 1.9% and the average amount spent per customer also fell by 1.9%. Even everyday essentials like groceries saw fewer buyers, compounding the drop in sales of non-essential goods. This double hit led to a grim 3.7% fall in same-store sales, highlighting a troubling shift in consumer behavior.

The signs of a weakening consumer base have been clear for multiple quarters, with inflation biting into household budgets and consumer spending power dwindling. Despite repeated reassurances from 97% of economists and retail experts that consumers remain resilient, Target’s dismal financial results paint a starkly different picture. This frustration was echoed in numerous interviews with industry insiders.

Adding to the crisis, a staggering 20% of credit card debt is now delinquent among the poorest 10% of ZIP codes in the US, the highest level since the Great Financial Crisis. Even the wealthiest 10% are seeing a rapid increase in delinquencies, underscoring the widespread nature of this financial strain.

A recent Harris poll conducted for the Guardian revealed that 56% of Americans currently believe the nation is in a recession. Moreover, 55% think the economy is shrinking, and 49% believe the S&P 500 is down for the year. This is despite data showing positive GDP growth for seven consecutive quarters and a 12% rise in the S&P 500, reaching a new all-time high. Such a stark disconnect between perception and reality is baffling.

The poll also indicates that 49% of Americans mistakenly believe unemployment is at a 50-year high, though it has been under 4%, a near 50-year low. A whopping 58% blame the president for the current economic woes.

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Small businesses, too, are crying out for help, with fears that nearly half could go broke. Last year alone, almost 100,000 businesses went insolvent, marking the worst record in over a decade. Business owners are drowning in bureaucratic red tape and facing rapidly rising costs. The sentiment among many is that this is the toughest economic climate they have ever faced, with the cost of living becoming insurmountable.

Bank credit growth has also taken a hit, with marginal declines in April reflecting hesitancy among commercial banks to expand their credit portfolios. The total credit outstanding across all commercial banks stood at $17.53 trillion at the beginning of May, a slight contraction compared to the previous month and a year ago. This cautious approach by banks is influenced by high interest rates and risks across various markets, further tightening the noose around both consumers and businesses.

In this volatile economic landscape, Target’s struggle is a glaring signal of deeper systemic issues. The dramatic fall in its stock is not just a corporate setback but a mirror reflecting the broader financial distress facing American consumers and businesses alike.

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