Thursday, May 23, 2024 5:00PM
The rapid-fire series of customer-friendly announcements isn't a coincidence, economists told ABC News, as many companies fight over customers who are pinching pennies after a prolonged bout of elevated prices. Aldi, a nationwide grocery chain, said earlier this month that it would lower prices on 250 items, reducing, for instance, the price of sirloin steak from $8.49 to $6.99.In response to accelerated price increases, the Federal Reserve embarked on an aggressive series of interest rate hikes and has yet to ease them. For nearly a year, the Fed has held interest rates at their highest level since 2001.
Over the first three months of 2024, U.S. household debt ballooned to a record $12.44 trillion, climbing $184 billion over that period, or about 1.1%, according to the New York Federal Reserve. In turn, strapped shoppers have become more sensitive in their spending, putting pressure on companies to lower their prices or risk losing out on business, Zandi added.
In 2021, corporate profit margins skyrocketed from about 11% in the first quarter to 19% in the second, eventually stabilizing at an elevated level of 15% over the ensuing year, Fed data showed.