Home Depot Just Issued This Warning About the Economy
Sales will fall between 3 and 4%, raising alarms about the economy.
Home Depot is sounding the alarm about people spending less on home improvement projects, reflecting a concern about interest rates and the economy. In their second quarter fiscal 2024 results, the company says it expects sales to fall between 3% and 4% in 2024, compared to 2023. The previous expectation was for a 1% decline. “The underlying long-term fundamentals supporting home improvement demand are strong,” Ted Decker, chair, president and CEO, said in a press release. “During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects.” Here are 6 other warning signs the economy may be in decline.
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Climbing unemployment is usually a significant warning sign. “Seeing an economic slump coming is a bit like reading tea leaves, but some classic signs don’t lie,” Nathan Jacobs, senior researcher at The Money Mongers, told Go Banking Rates. “Plus, when everyday people start doubting the economy and holding up their cash instead of spending, businesses take a direct hit.”
Rising national debt may be an economic red flag, experts say. “A significant increase in national debt could be a sign of a struggling economy,” Rory Donadio, CEO of Tribeca Capital Group, LLC, tells Go Banking Rates. “Although borrowing can stimulate economic growth, excessively high debt levels can raise concerns about the country’s ability to repay its loans, which can impact economic stability.”
A slowdown in manufacturing could be a sign of a troubled economy. “This can be caused by reduced demand for products and services, which can lead to layoffs and decreased consumer spending,” financial expert Stephen Clark told Go Banking Rates.
“The yield curve shows if bond investors prefer short-term or long-term debt,” says Marsh McLennan Agency. “When it’s inverted, it could mean they prefer long-term investments because of market expectations.”
A tumultuous stock market could spell trouble for the economy. “The stock market goes up and down every day, but if the S&P 500 or Dow Jones Industrial Average (DJIA) drops a lot, it means investors are worried about the future of the market,” says Marsh McLennan Agency.
Housing prices reflect the health of the economy. “When home prices go down, it could be a sign that the economy is getting worse,” says Marsh McLennan Agency. “This often happens in places where people build too many houses or buy and sell houses too much. It can also affect the credit market.”
