A measure of consumer confidence slumped to a four-month low in September as inflation and a deteriorating outlook for the economy weigh on people. That’s a blow given that individual spending fuels about two-thirds of the US economy, and the vast majority of Americans now have less savings than they had before the pandemic after adjusting for inflation.
Household purchasing power has already fallen, Hennes & Mauritz AB Chief Executive Officer Helena Helmersson told analysts this week, with large retailers such as Target Corp. seeing a drop in discretionary spending. Citigroup Inc. credit strategists including Michael Anderson wrote in a note this week that they expect high-yield and loan default rates to reach 4.6% and 5.3% by the third quarter of next year, up from 3.2% and 4.9% respectively.
BlackRock Inc. said insurance executives overseeing $29 trillion plan to pour more money into private debt and credit strategies while cutting back on private equity and real estate.