News The Balance Today: News You Need To Know on Aug. 15, 2022 Did We Shop Enough To Support the Economy? By Kristin Myers Published on August 15, 2022 Photo: Luis Alvarez / Getty Images With inflation figures coming in lower than expected last week and the job market booming, many people are feeling more optimistic about the strength of the U.S. economy. But will consumer spending keep up? It’s another important barometer of the economy’s health. We’ll be keeping an eye on shoppers over the next few days. The government’s monthly report on retail sales comes out on Wednesday, and major retailers Walmart and Target report their quarterly earnings on Tuesday and Wednesday, respectively. Previously, Walmart rang the alarm when it lowered expectations for its upcoming earnings, warning investors that it’s anticipating lower profits. As shoppers have pulled back spending on larger items like televisions, Walmart said it was trying to shift excess inventory by slashing prices. The financial health of the retail sector is very important to the U.S. economy, as roughly 70% of the economy is made up of consumer spending. If retail sales continue to rise, it means the economy is likely to continue to grow and remain strong. But with retailers like Walmart warning that shoppers are pulling back on spending because of inflation and fears of a recession, economists are forecasting a big slowdown in retail spending from the month prior, which could heighten worries about the economy. Home Prices Are Dropping for Some Buyers Over in the housing market, homebuilder optimism has fallen for the eighth straight month, according to the latest number from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. The index dropped to a level of 49 (anything below 50 is considered a negative sign). According to the NAHB, the U.S. is in a “housing recession” as higher interest rates, inflation, and red hot home prices have caused many homebuyers to sit on the sidelines. But this could mean good news if you’re an interested homebuyer, as nearly 20% of homebuilders are cutting prices in an attempt to limit the amount of sales cancellations and increase sales. This article originally appeared in 'The Balance Today' newsletter. You can get 'The Balance Today' delivered to your inbox daily, just sign up here. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Walmart. "FY2023 Q2 Earnings Release." Target. "Q2 2022 Target Corporation Earnings Conference Call." Walmart. "Walmart Inc. Provides Update for Second Quarter and Fiscal Year 2023." Economic Data, St. Louis Federal Reserve. "Shares of Gross Domestic Product: Personal Consumption Expenditures." National Association of Home Builders. "Builder Confidence Underwater After Falling for Eighth Consecutive Month."