Corporations on the front lines of the economy say cracks are forming

TECHNOLOGY

Corporations on the front lines of the economy say cracks are forming

Big tech, retail companies and consumer giants painted a mixed picture of a consumer economy where spending is still strong but beginning to wane

By Gerrit De Vynck, Rachel Lerman and Caroline O'Donovan
July 30, 2022 at 6:00 a.m. EDT

In recent days, executives from the biggest tech, retail and consumer products companies all attempted to address questions about the state of the economy, which has teetered on the brink of a recession. ... It’s complicated.

In Silicon Valley, profits at tech companies like Google and Apple generally beat expectations, but executives said there are signs of some niche slowing in consumer spending. Consumer products giant Procter & Gamble said it is expecting a tougher 2023, although it’s still raising prices. Mastercard said spending was steady among the wealthy, but slowing among lower-income customers.

Meanwhile, both Walmart and Best Buy warned that when they report earnings in August, it will be worse than expected — in large part because of changes in consumer habits. ... “We’re seeing strong growth,” said Amazon Chief Financial Officer Brian Olsavsky. “But we’re cognizant things could change quickly.”

Four times a year, the biggest publicly traded companies report how much money they’re making — or losing, in addition to future outlooks. Those reports provide helpful snapshots of how consumers are spending, a key metric for predicting economic performance.

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By Gerrit De Vynck
Gerrit De Vynck is a tech reporter for The Washington Post. He writes about Google and the algorithms that increasingly shape society. De Vynck also helps lead The Post's coverage of ransomware and misinformation. He previously covered tech for seven years at Bloomberg News. Twitter https://twitter.com/GerritD

By Rachel Lerman
Rachel Lerman covers breaking news in technology for The Washington Post. Twitter https://twitter.com/rachelerman

By Caroline O'Donovan
Caroline O'Donovan covers Amazon for the tech team. Before joining The Washington Post, she covered tech and labor for BuzzFeed News. Twitter https://twitter.com/ceodonovan