The stock market took another hit on Thursday after the Bureau of Economic Analysis (BEA) released its latest report which showed consumer spending slowed in May.
Overall consumer spending rose just 0.2% in May, according to BEA’s Thursday report. This marks a slowdown from the 0.9% growth in April. The Bureau’s measure of inflation remained unchanged from the last month, with prices in May up 6.3% compared to the same period last year.
This new data stoked investor worries leading to a sell off on Thursday, which marks the final day of the second quarter.
As of this report, the Dow Jones Industrial Average shed 349 points, or 1.13% on Thursday. The S&P 500 fell 42 points, or 1.1%, while the Nasdaq Composite sank 177 points, or 1.59%.
With these numbers, The Dow and S&P 500 continuing a dismal streak that brought on a bear market earlier this month, and are on track for their worst three-month period since the first quarter of 2020 when COVID-related lockdowns sent the market tumbling.
Footwear stocks were also impacted across the board as well. As of Thursday morning, Caleres fell 2.28%, Crocs was down 1.6%, Nike sank 1.28%, and Adidas was down 0.62%.
Retailers also felt the heat on Thursday. Foot Locker fell 3.86%, Kohl’s dropped 3.15%, Shoe Carnival was down 1.48%, Target was down 1.01% and even Amazon saw a decrease of 3.36%.
In today’s same report, the BEA also stated that retail sales in May slowed from the prior month, though were still well above last year’s levels. Retail and food service sales in May 2022 totaled $672.9 billion, marking a seasonally adjusted 0.3% decrease from the previous month and an 8.1% leap from May 2021, the U.S. Census Bureau reported.
At the same time, inflation hit a more than 40-year high in. May, with consumer prices up 8.6% compared to the year ago period, according to the Bureau of Labor Statistics’ monthly report. This number was up from 8.3% growth in April and from the 8.5% growth in March.
Despite these numbers, the National Retail Federation (NRF) released a statement on Thursday which said that American consumers remain financially healthy, and the nation is unlikely to enter a recession during the remainder of 2022.
“I am not betting on an official recession in the near term, but the most recent research pegs the risk over the next year as about one in three and it will be touch and go in 2023,” NRF chief economist Jack Kleinhenz said in a statement. “In the meantime, a contracting economy short of a recession is not out of the question.”