The U.S. economy is showing increasing signs that the federal government’s spending spree of the past two years is doing serious damage.
The massive, unnecessary federal spending increase, which has been debt-financed despite President Biden’s claims to the contrary, is an especially powerful stimulant to inflation. To fight that government-caused inflation, the Federal Reserve raised interest rates radically over the past year, suppressing investment and consumer spending.
Profits of the Kohl’s department store chain fell by 60% in the second quarter compared with the year before. The fitness bike company Peloton’s stock value declined on expectations of continuing large revenue losses. “Peloton Interactive shares plunged 23% Wednesday to record lows after the company reported another decline in paying subscribers and said the costs of an equipment recall was denting its profit,” The Wall Street Journal reports. “The stock has declined roughly 50% in the past 12 months and more than 95% from its pandemic-fueled high in early 2021.
“What’s important to note is that about half of the retailer’s customer base is in the lower income bracket and might serve as more evidence that the weakest households continue to pull back on spending,” ZeroHedge reports.
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