Recently, in the earnings call of the consumer industry giants, everyone began to warn that the sales performance in the first quarter was lower than expected, and the full-year outlook may be more severe than Wall Street's estimates, and consumers can't bear it.

Low-income groups began to cut back on food and clothing

As a bellwether for the U.S. retail industry, Walmart's performance is often seen as a key indicator of consumer health.

Last year, the company successfully attracted high-income consumers, turning economic uncertainty into a growth engine. However, in its fourth-quarter earnings report released last month, Walmart warned that profit growth would be lower than expected in the coming year, causing stock prices to fall and raising concerns about the ability of consumers to spend.

This is an extremely rare signal for a retail giant that typically performs steadily during periods of economic weakness. This also indicates that Walmart expects that in the coming year, consumers may spend less on non-essential items and are more inclined to buy basic necessities such as milk and paper towels.

Not only Wal-Mart, but also a number of well-known brands such as Dick Sporting Goods, E.l.f. Beauty and Abercrombie have also lowered their guidance. Ed, Chairman of Dick Sporting Goods Stack was even more blunt: "The world is full of uncertainties, is the tariff policy changing?" How will consumers react if tariffs are imposed and prices rise? In addition, companies that have warned of uncertainty about consumer demand over the past year are now even more pessimistic.

In addition to tariffs and inflation, large-scale government layoffs and fiscal austerity are also important factors in the decline in consumer confidence.

High-end consumer groups are more cautious in spending money

The air travel industry is also a "gloomy cloud", which also confirms signs of economic weakness.

Delta's recent earnings revisions reflect not only weakening consumer confidence, but also underlying weakness in overall economic activity. As the most profitable airline in the United States, Delta Air Lines has relied on high-end consumer groups to support its performance in recent years, but the CEO In an interview with CNBC, Ed Bastian admitted that the decline in consumer confidence has led to a decline in bookings from both leisure and business travelers, forcing the company to lower its revenue and profit guidance.

"In the consumer discretionary space, consumers don't like uncertainty," Bastian noted. In the face of uncertainty, they tend to cut back on expenses. While we believe this is only a short transition period, we must understand the situation and wait for the market to return to leveling. The remarks not only revealed a change in consumer psychology, but also suggested that the slowdown in aviation demand could be a warning sign of waning economic momentum. After all, airline stocks have always been seen by investors as a barometer of the economy.

Notably, Delta's reason for the downward revision is not only the decline in travel bookings, but also consumer concerns about aviation safety. Two major accidents in recent times, including Delta's forced landing in Toronto.

While airlines remain optimistic about long-term demand in 2025, near-term uncertainty is adding to market pressures and investor sentiment is becoming more cautious.

Market sentiment tends to be cautious

The current economic signals are giving some troubling warnings. Weak demand from the airline industry, cautious expectations from retail giants, and pressure on the job market have all left investors worried about the future economic outlook. These trends have not only weighed on previously red-hot stock markets, but have also sparked discussion of a potential recession. The S&P 500 is down 10% from its all-time high in February, and despite a recovery in early trading Friday, sentiment remains fragile.

Over the past year, shares of companies such as United, Walmart, Abercrombie and others have outperformed the S&P 500 even as consumers cut back on spending on discretionary items. Today, however, these companies are becoming more cautious about the outlook. After four years of historic inflation, consumers may be nearing the limit of their spending power. No matter how strong the execution of enterprises is, it will be difficult to fully offset the upward pressure brought about by tariffs.

The job market, which has underpinned the U.S. economy in recent years, has also begun to show signs of weakness. Slowing job growth and rising unemployment are changes that have not only affected consumer confidence, but also weighed on overall economic momentum.

The performance of the job market has always been an important indicator of the health of the economy, and the current trend of weakness is worth keeping a close eye on by investors.