Amazon's CFO said politics and the Olympics are distracting people from spending. He's not actually wrong about the state of the stressed US consumer.
Yagi Studio/Getty, Amazon, Tyler Le/BI
It's safe to say the US has a lot going on right now.
In fact, there's so much going on that Amazon CFO Brian Olsavsky partially blamed a weaker-than-expected sales forecast for this quarter on the Olympics and the Trump assassination attempt.
"There's a lot of events that are occupying people's attention right now, from political conventions to the election itself to the Olympics," he said on Thursday.
"No matter what you're selling or providing, customers only have so much attention," Olsavsky said. "When high profile things happen, or the assassination attempt a couple of weeks ago, you do see that people shift their attention to news, and so it's more about distractions."
And while it might sound like the CFO version of the old "dog ate my homework" excuse, he could be onto something.
The news cycle is already busy churning out stories of gold medals and keeping up with the campaign trail, and we're all still waiting to see who Kamala Harris selects as her vice president candidate after Joe Biden's surprise move to drop out of the presidential race. Then there's the election itself — and, of course, the chance for further unprecedented news (like the shocking Trump shooting) before November.
Meantime, consumers are already suffering from a prolonged period of high prices and inflation that's changing how we spend money.
Fast food chains, including McDonald's, Burger King, and Taco Bell, have had to add discounts to their menus to get customers to come back and eat with them again.
Coffee giant Starbucks saw visits drop amid "a challenging consumer environment," CEO Laxman Narasimhan said.
Alcohol companies are suffering, too. Diageo, which sells brands including Don Julio, Smirnoff, and Johnnie Walker, experienced its first annual fall in sales since 2020, the Financial Times reported.
"We are in a very extraordinary consumer environment," CEO Debra Crew said, according to the FT. "You do see persistent inflation that is really weighing on consumers and weighing on their wallets."
Meantime, other signs are pointing to a slowing economy. On Friday, data showed the US added 114,000 jobs in July — far below estimates of 175,000. The unemployment rate also unexpectedly rose. That spooked investors, with all three major US stock indices dropping significantly.
So, although the Olympics maybe aren't stopping everyone from adding items to their Amazon carts, it seems like Olsavsky does indeed have a point. So buckle up for the rest of 2024 — it might be a bumpy ride.
