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Walmart Is Plunging (And 5 Other New Reasons The Economy Should Frighten You)

Walmart Is Plunging (And 5 Other New Reasons The Economy Should Worry You)

Image source: CNN

Walmart’s management team dropped a financial bombshell this week that sent US stock prices tumbling, revealing that sales will remain flat at the world’s largest retailer and earnings could drop by 6 to 12 percent.

That led to it having its worst day on Wall Street in 15 years.

Even if you don’t shop at Walmart, you need to worry about the news because many economists regard the super retailer as a barometer for the nation’s economy. Some say if Walmart is doing badly, America is, too.

But the revelation by Walmart isn’t the only negative financial news lately. Consider:

1. Retail sales are flat elsewhere, too

Revenue at Costco Wholesale (the nation’s third largest retailer) grew by just .72 percent between May and August of 2015. Revenue at Kroger, the nation’s largest grocer and fourth-largest retailer, only grew by .9 percent during the third quarter of 2015.

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Retail spending, the main force that drives the American economy, is barely growing.

2. Manufacturing is declining

The US manufacturing index has declined for three months. By October the index had fallen to 50.2, and if it dips below 50 its means manufacturing is contracting, CNN Money reported. Experts believe manufacturing is declining because of lower demand for US products overseas.

3. Average American incomes are falling

The US Census Bureau reported that average household income fell by 1.5% or an average of around $805 in 2014 after adjusting for inflation, The Wall Street Journal reported. That was the third straight year in which average Americans’ incomes stayed relatively flat.

4. Major chains are closing hundreds of locations

Several major chains are closing hundreds of stores. McDonalds is planning to close up to 700 restaurants after its revenue fell by 11 percent between 2014 and 2015, Fortune reported. Macy’s is planning to close between 35 and 40 percent of its stores because sales had fallen by 2.1 percent. Dunkin Donuts is planning to close up to 100 locations, CNN Money reported.

5. Pension funds are running out of money

Up to 1 million American retirees could see their pension checks cut dramatically over the next few years because businesses and governments are running out of money, according to The Washington Post. To make matters worse, the Pension Benefit Guaranty Corporation, the federal agency that is supposed to bail out pension funds in trouble, is itself running out of money.

Are you concerned about the latest news on the economy? Share your thoughts in the section below:

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