FILE PHOTO: Shoppers carry bags of purchased merchandise at the King of Prussia Mall, United States’ largest retail shopping space, in King of Prussia, Pennsylvania, U.S., December 8, 2018.
WASHINGTON, Oct 29 (Reuters Breakingviews) – U.S. consumers are still an economic bright spot, despite a slowdown in spending. Instead, it’s supply-chain snarls that will bring down the holiday cheer. They could dampen spirits into the next year too.
The Delta variant surge in September dented what had been robust shopping. Consumer spending rose 0.6% from August, compared to a 1% bump in the previous one-month period, the Commerce Department said on Friday. But consumers are expected to come back for the holidays as Covid-19 cases ease. The National Retail Federation on Wednesday projected record spending in the next two months, with a bump of up to 11% compared to last year.
Supply-chain problems will last longer. Such issues, including chip shortages , cost Apple (AAPL.O) $6 billion in sales in its last fiscal quarter and it may be worse during the holidays, Chief Executive Tim Cook read more told Reuters on Thursday. Amazon.com (AMZN.O) expects labor, inflation and supply-chain constraints to cost $4 billion this quarter.
Higher prices so far haven’t turned off customers, but hard-to-find iPhones and other goods could hike costs further, which could eventually take a toll on consumer confidence. With hiccups continuing in 2022, consumers and companies will feel the pain beyond the holidays. (By Gina Chon)
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Editing by Jennifer Saba and Sharon Lam
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