Retailers Reconsider Big Moves Amid Economic Uncertainty

With the possibility of a potential recession looming, among other factors, retailers may be rethinking major decisions. They are also said to be waiting to see how global trade tensions and earnings over the holiday quarter play out, CNBC reported.

At National Retail Federation’s Big Show in New York on Monday (Jan. 14), KPMG Principal and Chief Economist Constance Hunter noted that there was at least a 50 percent likelihood that the will country move toward a recession this year. Hunter said, according to CNBC, that it will be “very hard for businesses to keep expanding.” And Hunter noted that, among other factors, retailers are having a harder time getting workers than before. At the same time, it was reported that companies and analysts might not know how the industry is faring as the government’s December retail sales report has been pushed back because of the government shutdown.

The news comes as Former Federal Reserve Chair Janet Yellen says that signs are pointing to a slowdown in business spending this year. Yellen said at the NRF show, according to Bloomberg, that “All the hard data that we have on economic activity suggests that things are in good shape.” But she went on to say, “The global economy was firing on all cylinders in 2018 and now looks like we’ve got less strong and less synchronized global growth.”

At the same time, she noted that global trade tensions and a slowdown in China as well as downside risk in Europe could factor into a slowdown this year. Yellen also said that there have been reports of “businesses beginning to put investment plans on hold because of the uncertainties they face in the global environment and around supply chains and trade.” When it comes to factors that could slow the economy, Yellen pointed to the dip in the stock market and higher borrowing rates for corporations, among other factors.