Fitch Ratings said U.S. consumer spending is slowing sharply as new tariffs lift prices and a softer labor market pressures households, with the agency highlighting that front-loaded purchases ahead of tariff hikes are fading heading into the second half of 2025.
Key facts:
- Fitch projects weaker household demand in 2H25 as tariffs increase costs and disposable income growth slows.
- The agency cut sector outlooks for U.S. retail and consumer products to “Deteriorating.”
- Rising inflation and a cooling labor market are expected to constrain discretionary spending.
Relevant Companies
- Walmart ($WMT): Faces potential margin pressure and consumer pullback on higher prices.
- Target ($TGT): Sensitive to discretionary spending declines as household budgets tighten.
- Home Depot ($HD): Exposure to big-ticket consumer purchases that may weaken under tariff-driven inflation.
Editor’s Note: This is a developing story. This article may be updated as more details become available.
