Walmart, America's largest retailer, spooked investors late last month with a weaker-than-expected 2025 sales and profit forecast, falling short of Wall Street analysts' expectations. The outlook underscores mounting consumer headwinds for cash-strapped households. Beyond Walmart, Goldman's latest consumer health commentary from corporate America shows a cautious outlook.
Let's begin with consumer health commentary from top retailers, including Advance Auto Parts, Home Depot, Lowe's, and Walmart, among others, with many management teams warning about mounting macroeconomic headwinds and volatility through this year.
Goldman's Kate McShane, Mark Jordan, and others summarized the consumer health commentary of major retailers in a note to clients on Monday.
Given the ongoing consumer gloom, the latest Atlanta Fed's GDPNOW forecast for Q1 2025 collapsed on Monday from +2.33% to -2.825% - a stunning 510bps plunge in growth expectations.
Today's drop to a 2.825% contraction is the worst forecast for GDP since the COVID lockdowns in 2020...
Last week, we cited numerous notes from leading institutional desks highlighting the emergence of growth scare and tariffs weighed on outlooks:
For more color about the broader economic cycle, US Treasury Secretary Bessent recently explained, "We're seeing the hangover from the excess spending in the Biden 4 years [read here]. In 6 to 12 months, it becomes Trump's economy."
Last July, we provided color on Biden's $1 trillion "stealth stimulus" ...
From July 2023: Here Is The $1 Trillion "Stealth Stimulus" Behind Bidenomicshttps://t.co/OqgQIgNECp https://t.co/2peCTLo19e
— zerohedge (@zerohedge) March 1, 2025
The hangover from 'Bidenomics' appears to be creating headwinds for the US economy while potentially helping to tame Biden's inflation storm.
If that's the case, it may suggest that borrowing costs could decline as growth scare narratives gain traction. Then again, a worsening tariff war may only keep rates elevated...
