Trade services drop sharply in July; Home Depot warns of weak economy

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  • Trade Services: The claim about trade services seeing the second-largest drop on record (-1.3%) in July and now being negative year-over-year is accurate. This reflects a significant decline in margins received by wholesalers and retailers.
  • Economic Data Surprises: Economic data surprises have indeed been weak for several months, indicating that economic indicators have been consistently underperforming expectations.
  • Home Depot: Home Depot has issued a warning about the economy, lowering its sales expectations for the year. The company cited higher interest rates and economic concerns as reasons for reduced consumer spending on home improvement projects. Home Depot’s CEO, Ted Decker, mentioned that higher interest rates and macro-economic uncertainty have pressured consumer demand.
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Home Depot issues a warning about the economy

The home improvement giant, a bellwether of consumer spending and the housing market, lowered its sales expectations for the year. It said customers were spending less on home improvement projects, pressured by higher interest rates and concerns that the economy is getting worse.

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Home Depot’s business is closely tied to the housing market, and high interest rates are putting a brake on housing turnover and consumers financing larger projects.

“During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects,” Ted Decker, Home Depot’s CEO, said in a news release.

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