Authored by Tom Ozimek via The Epoch Times
The all-mighty American consumer, whose spending drives the economy, is reaching a breaking point and is on the verge of folding, according to former Walmart CEO Bill Simon.
Mr. Simon told CNBC in a recent interview that a series of factors—political polarization, inflation, and high interest rates—were all working together to undermine consumers and their propensity to spend.
“That sort of pileup wears on the consumer and makes them wary,” Mr. Simon told the outlet. “For the first time in a long time, there’s a reason for the consumer to pause.”
Consumer spending is a major driver of the U.S. economy, accounting for roughly two-thirds of gross domestic product (GDP).
Mr. Simon, who now serves on the Board of Directors for Darden Restaurants and Hanesbrands Inc., said that, after a long period of cheap money cut short by the Federal Reserve’s rapid rate hikes in response to soaring inflation, consumers are now beginning to buckle.
“Consumers had an incredible 10-, 12-year run,” he told CNBC’s “Fast Money” program. “Markets were buoyant. Interest rates were low. Money was available.”
But now, the music has stopped, and the party is grinding to a halt…