The Balance Today: News You Need To Know on Oct. 14, 2022

Inflation Weighs on Shoppers, Markets

A woman looks for items on her list at the grocery store.

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Inflation continues to impact us all. Retail sales were flat in September as we all grow increasingly cautious and tired of rising prices. Economists had originally expected a jump of 0.3%. Even with the slowing appetite to buy things, consumer spending is still roughly 8.2% higher than last year.

This is, of course, to be expected. As the Federal Reserve continues to hike interest rates to bring down inflation, the likelihood of a recession grows. That makes shoppers less inclined to spend cash that they could be saving for upcoming rainy days instead. How much people are shopping is an important indicator in the U.S. economy, since 70% of GDP is consumer spending. In other words, when people stop shopping, the economy starts to slow down.

After rallying yesterday despite news that inflation remained stubbornly high, markets are falling today as they continue to digest the inflation and retail sales data. Earnings season has officially started, which could provide some boosts if companies post strong quarterly reports. But investors are going into the next few weeks expecting things to not go so well. It is estimated that quarterly growth for the country’s largest companies will only be 2.4%—the worst since the third quarter of 2020.

So continue to expect some trouble and volatility ahead. And if you want to save yourself some heartache, don’t stare at your investment accounts each day. You might end up disappointed.

This article originally appeared in 'The Balance Today' newsletter. You can get 'The Balance Today' delivered to your inbox daily, just sign up here.

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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.
  1. MarketWatch. "U.S. Economic Calendar."

  2. Census Bureau. "Advance Monthly Sales For Retail and Food Services, September 2022."

  3. FactSet. "Earnings Insights."

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