Latest news with #consumerspending
Malay Mail
a day ago
- Business
- Malay Mail
BMI: High household debt putting a damper on Malaysian consumer spending
KUALA LUMPUR, July 29 — High household debt levels remain a significant constraint on Malaysia's consumer spending despite an otherwise positive economic outlook, according to a new BMI report. According to the Fitch Solutions firm, household debt reached 69.5 per cent of GDP in the fourth quarter of 2024, up slightly from 69.3 per cent in the previous quarter, based on Bank Negara Malaysia data. 'A high level of household debt remains a risk to our consumer outlook, as it not only constrains future borrowing capacity but impacts current disposable income levels,' BMI said in the report. High debt servicing costs are eating into household spending power even as the central bank begins to ease monetary policy, BMI analysts warned. Consumer confidence has weakened significantly, with the Malaysian Institute of Economic Research recording an average of 87.1 in the first quarter of 2024, down from 89.4 in the fourth quarter of 2023. This represents one of the lowest consumer confidence readings since the second quarter of 2022, when it reached 85.9, compared to a long-term average of 96.5 between 2005 and 2023, the report noted. Retail sales growth has shown signs of softening, coming in at 4.9 per cent year-on-year in May 2025, up from 4.7 per cent in April but marking a notable decline from earlier in the year. Inflationary pressures in essential commodities such as food and fuel continue to weigh particularly heavily on low- and middle-income households, BMI said. People walk in a shopping mall in Kuala Lumpur on August 7, 2024. — Picture by Firdaus Latif Food price inflation, while moderating to 2.1 per cent in June 2025 from an average of 2.5 per cent in the fourth quarter of 2024, remains a key risk factor for consumer spending. The research firm noted that debt servicing costs could rise again if inflationary pressures accelerate and force the central bank to return to interest rate hikes. Malaysian consumers remain exposed to global economic risks including supply chain disruptions, trade tensions, and geopolitical conflicts that could impact purchasing power. Rising political risks associated with inflation and debt servicing costs could complicate policymaking and further strain the consumer sector, analysts warned. Global supply chain disruptions due to conflicts and longer shipping routes are leading to higher prices and product availability issues that force consumers toward more expensive alternatives. Trade barriers and retaliatory measures, particularly involving China, Europe, and the US, are expected to inflate costs and strain supply chains further. A potential deep recession in the US could spread to other economies and significantly impact global consumer markets, including Malaysia, BMI cautioned. Despite these challenges, the firm maintained its forecast for consumer spending growth of 3.8 per cent in 2025 and 5.0 per cent in 2026, supported by wage gains and monetary easing.
Sky News
5 days ago
- Business
- Sky News
Good economic news as sunny weather boosted retail sales
Retail sales grew in June as warm weather boosted spending and day trips, official figures show. Spending on goods such as food, clothes and household items rose 0.9%, the Office for National Statistics (ONS) said. It's a bounce back from the 2.8% dip in May, but last month's figure was below economists' forecast 1.2% uplift as consumers dealt with higher prices from increased inflation. Also weighing on spending was reduced consumer confidence amid talk of higher taxes, according to a closely watched indicator from market research firm GfK. Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy. Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority. 0:56 Where have people been shopping? June's retail sales rise came as people bought more in supermarkets, and retailers said drinks sales were up. While hot and sunny weather boosted some brick-and-mortar shops, the heat led some to head online. Non-store retailers, which include mainly online shops, but also market stalls, had sold the most in more than three years. Not since February 2022 had sales been so high as the Met Office said England had its warmest ever June, and the second warmest for the UK as a whole. The June increases suggest that the May drop was a bump in the road. When looked at as a whole, the first six months of the year saw retail sales up 1.7%. Filling up the car for day trips to take advantage of the sun played an important role in the retail sales growth. When fuel is excluded, the rise was smaller, just 0.6%. Welcome news Despite lower consumer sentiment and more expensive goods, consumers are benefitting from rising wages and are cutting back on savings. The ONS lifestyle survey - backed up by hard data like the Bank of England's money and credit figures - shows that households have rebuilt their rainy day savings and are cutting back on the amount of money they squirrel away each month.
Yahoo
22-07-2025
- Business
- Yahoo
Capital One reports higher profit as interest income, fees rise
(Reuters) -Capital One Financial reported a rise in second-quarter adjusted profit on Tuesday, as the consumer lender was helped by a boost in interest income on its credit card debt and higher fee income. Shares of the company, which have gained nearly 22% in 2025, rose 2.5% after the bell. Consumer spending displayed underlying resilience in the April to June quarter, as many consumers curtailed discretionary spending amid inflationary pressures fueled by uncertainties over U.S. President Trump's trade policies, while maintaining steady outlays on essential goods and services. However, companies such as Capital One are shielded from economic volatility and ensuing industry weakness because of their credit card business. Interest rates on credit card debt are significantly higher than those on mortgages and other kinds of loans. Capital One became the biggest U.S. credit card issuer by balances after its acquisition of Discover Financial was completed midway through the second quarter, following more than a year of regulatory to-and-fro. The McLean, Virginia-based company's net interest income — the difference between what it makes on loans and pays out on deposits — rose 32.5% to $10 billion in the quarter. Capital One's quarterly non-interest income, which primarily consists of interchange income, net of reward expenses, service charges and other customer-related fees, rose nearly 27% to $2.50 billion. However, as consumers pull back on discretionary spending due to high borrowing costs, companies have resorted to building a bigger buffer to help shield themselves from potential loan defaults. The company's loan loss provisions stood at $11.43 billion in the second quarter, compared to $3.91 billion a year earlier. Net charge-offs, or debts that are unlikely to be recovered, jumped 16% to $3.06 billion in the period, the company said. Capital One's adjusted net income available to common stockholders was $2.77 billion, or $5.48 per share, in the three months ended June 30, from $1.21 billion, or $3.14 per share, a year earlier.
Reuters
22-07-2025
- Business
- Reuters
Capital One reports higher profit as interest income, fees rise
July 22 (Reuters) - Capital One Financial (COF.N), opens new tab reported a rise in second-quarter adjusted profit on Tuesday, as the consumer lender was helped by a boost in interest income on its credit card debt and higher fee income. Shares of the company, which have gained nearly 22% in 2025, rose 2.5% after the bell. Consumer spending displayed underlying resilience in the April to June quarter, as many consumers curtailed discretionary spending amid inflationary pressures fueled by uncertainties over U.S. President Trump's trade policies, while maintaining steady outlays on essential goods and services. However, companies such as Capital One are shielded from economic volatility and ensuing industry weakness because of their credit card business. Interest rates on credit card debt are significantly higher than those on mortgages and other kinds of loans. Capital One became the biggest U.S. credit card issuer by balances after its acquisition of Discover Financial was completed midway through the second quarter, following more than a year of regulatory to-and-fro. The McLean, Virginia-based company's net interest income — the difference between what it makes on loans and pays out on deposits — rose 32.5% to $10 billion in the quarter. Capital One's quarterly non-interest income, which primarily consists of interchange income, net of reward expenses, service charges and other customer-related fees, rose nearly 27% to $2.50 billion. However, as consumers pull back on discretionary spending due to high borrowing costs, companies have resorted to building a bigger buffer to help shield themselves from potential loan defaults. The company's loan loss provisions stood at $11.43 billion in the second quarter, compared to $3.91 billion a year earlier. Net charge-offs, or debts that are unlikely to be recovered, jumped 16% to $3.06 billion in the period, the company said. Capital One's adjusted net income available to common stockholders was $2.77 billion, or $5.48 per share, in the three months ended June 30, from $1.21 billion, or $3.14 per share, a year earlier.
Forbes
18-07-2025
- Business
- Forbes
June Retail Sales Beat Expectations As Americans Kept Spending
American consumers defied expectations in June – typically a slow month in retail – posting a 0.6% seasonally-adjusted uptick in May-to-June spending and a 3.7% unadjusted increase year-over-year, as shoppers appear to be adopting a 'wait-and-see' attitude toward economic uncertainty and looming tariffs. Consumers continue to spend in the face of uncertainty and shrugging off tariff concerns,' said ... More Katie Thomas, Kearney Consumer Institute. getty Underscoring June's uptick wasn't just a blip, the U.S. Census Bureau reported seasonally-adjusted retail sales from April through June advanced 4.1% year-over-year, signaling unexpected strength in consumer demand. Retail sales totaled $4.2 trillion through the first half of 2025, up 3.6%, demonstrating consumer resilience despite all the uncertainties and wavering consumer confidence. The automotive sector, which is retail's largest, grew 5.1% over the last six months, and non-store retail, the second largest category, posted 6.4% growth. The third largest and highly discretionary food services sector advanced 5.1%, followed in order of magnitude by food and beverage stores up 2.6% and general merchandise stores up 2.4%. Gasoline station sales dropped 4% reflecting a decline in prices – good news for consumers. Will the other shoe drop in consumer spending and sentiment if and when Trump's tariffs kick in? Retailers have been on pins and needles this year with tariffs expected to have a strong inflationary impact once they take hold. Early in the year, retailers stocked up on inventory to get ahead of tariffs and there are indications consumers pulled forward some big ticket and planned purchases as well. On a positive note, National Retail Federation chief economist Jack Kleinhenz said 'economic fundamentals appear solid,' despite pervasive uncertainty surrounding tariffs, immigration, deregulation and other government policies. And while he anticipates tariffs to potentially increase prices and cause a 'downshift' in consumer spending, he also sees a bright side in the passage of the One Big Beautiful Bill, which provides business incentives, permanent tax cuts for individuals and measures to encourage workforce participation. Kleinhenz said the bill's passage 'meaningfully reduces fiscal policy uncertainty.' Crucial Quote 'Consumers continue to spend in the face of uncertainty and shrugging off tariff concerns, with U.S. retail sales showing relative stability compared to last month and outpacing inflation compared to a year ago,' said Katie Thomas, Kearney Consumer Institute. Consumers got a jump on back-to-school spending this year, with 67% of shoppers having begun in early July, compared to 55% who made an early start last year, according to a survey of 7,600 adults conducted by Prosper Insights for the National Retail Federation between July 1-7. The NRF said shoppers were motivated to shop early specifically out of concern that prices will rise due to tariffs. Even as consumers are carefully budgeting for back-to-school, NRF projects total back-to-school spending will increase about 1.5% to $39.4 billion, up from $38.8 billion last year. Back-to-college will grow even more, up 2.5% from $86.6 billion in 2024 to $88.8 billion. What We Don't Know Observing that halfway through the year, retail has remained steady, Global Data's Neil Saunders suggests, 'There is every likelihood that retail performance will moderate with tariff deadlines now looming, inflation coming in hotter and a range of economic pressures stacked up.' Or will consumer resilience defy expectations and keep retail cash registers humming? Further Reading Retail Sales Jumped More Than Expected Last Month (CNN, 7/17/2025) U.S. Retail Sales Growth, Steady Job Market Bolster Fed's Rate-Cut Delay (Reuters, 7/17/2025) Advance Monthly Sales for Retail and Food Services (U.S. Census Bureau, 7/17/2025) Monthly Economic Review: July 2025 (National Retail Federation, 7/8/2025) Forbes Prime Day Summer Sales Event Tops Forecasts To Reach $24.1 Billion In Online Sales By Pamela N. Danziger
