Despite functioning at "a slower pace," the economy “still does not appear to be in a recession and remains unlikely to enter one this year,” said National Retail Federation Chief Economist Jack Kleinhenz Tuesday. The underlying strength of the economy is “strong enough to deal with inflation and keep a recession at bay -- or short-lived even if we are wrong," Kleinhenz said. Gross domestic product declined 1.6% year over year in Q1 and 0.9% in Q2. Though two consecutive quarters of decline is a common informal indicator of a recession, “the official declaration is up to the National Bureau of Economic Research, which defines a recession as a significant decline spread across the economy,” said the economist: “The bureau has yet to rule on whether the current downturn meets that definition.” Private final sales to domestic purchasers remained in positive territory for the first half of the year, though flat in Q2, and employment, retail sales, income and industrial production had slower growth, “but none have contracted,” he said. A significant downturn in employment could signal a recession, Kleinhenz said; the June unemployment rate was 3.6%, just above the 50-year pre-COVID-19 pandemic low of 3.5% in January 2020. Economic indicators remain strong, but “it is now clear that the world has changed” since the beginning of the year,” Kleinhenz said, citing the persistence of COVID-19, continuing supply chain challenges, the ongoing war in Ukraine and other issues driving inflation. NRF “remains constructive in our outlook,” holding to a 6%-8% year-on-year retail sales growth projection. “The key concern remains inflation and the Fed’s policy moves to contain it,” he said.

U.S. consumer spending on video game products declined 13% year over year in Q2 to $12.35 billion, reported NPD Tuesday. Non-mobile subscription content spending was the quarter’s only growth category, with all other categories falling, and mobile content contributing most to the overall decline, said NPD. While NPD projections “foresaw a downward trend in mobile spending as life in the U.S. began its return to a new normal and consumers had fewer opportunities to engage with these titles, the current economic environment has certainly contributed to a more expediated decline,” it said. Still, U.S. consumer spending on mobile games remains higher than it was pre-COVID-19 pandemic, it said.

Global tablet shipments reached 40.5 million units in Q2 for year-over-year growth of only 0.15%, reported IDC Friday. The result was better than expected, said IDC, fueled by sales from Amazon’s Prime Day in the U.S. and similar online promotional events in China. Q2 shipments of Chromebooks, the go-to connectivity tool at the peak of remote learning during the COVID-19 pandemic, plunged 51.4% year over year to 6 million units, said IDC. The decline was expected as the inventory buildup in Chromebooks “is still being cleared out and demand in the education sector has slowed,” it said: “Shipment volumes are still above pre-pandemic levels.” Though Chromebook shipments have trended down in recent quarters, “there's still opportunity to be had as the pandemic has brought about positive changes to Chrome adoption," said IDC analyst Jitesh Ubrani. "The need for remote learning accelerated schools' plans to reach a 1:1 ratio for PCs to students and this ratio will likely continue to hold in the future, and even if PC shipments decline in other categories, Chrome will continue at these elevated levels."

German consumers bought 2.3 million TV sets in 2022's first half, a 17% decline from January-June 2021, reported Gfu Thursday, according to an unofficial English translation. Sales in revenue terms dropped only 10% to 1.6 billion euros ($1.62 billion), due to average selling prices rising nearly 9% to just under 706 euros ($715), it said. The proportion of OLED TV units sold increased to 13% from 8% a year earlier, and in revenue terms increased to 29% share from 22%, it said. The first-half declines were “not surprising,” amid the tough comparisons with 2021, when TV sales were “very successful” due to the COVID-19 pandemic, said Sara Warneke, Gfu managing director-consumer and home electronics. “The TV market is usually stronger in the second half of the year,” she said, and that trend “could be supported by the World Cup in November and December.” World Cup 2022 opens Nov. 21 in Qatar.

Prime Day and other big retailer promotions in the week ended July 16 boosted retail revenue 14% over the comparable “non-promotional week” in 2021, but unit sales were 1% lower, reported NPD Wednesday. Compared with the same pre-COVID-19 pandemic week in 2019, which “also coincided with these promotional events,” retail revenue this year was up 17%, but unit sales declined 5%, it said. “Consumers are clearly getting energized by promotions as they continue to spend, but elevated prices and the lack of promotional depth are hindering already low demand,” said Marshal Cohen, NPD’s chief retail industry adviser. “The typical back-to-school kickoff provided by Prime Days and other July retail promotions did not hit all industries equally, indicating this will be another flattened retail shopping period, similar to what we’ve seen with holiday peaks year-to-date.” Most demand signals show consumers “are just starting to spend on back-to-school items,” said NPD. Demand was higher during the promotional week in segments like small appliances, beauty and technology, but big back-to-school industries like office supplies, apparel and footwear “did not yet get the same kind of lift,” it said. Of consumers that NPD canvassed through the third week of July, only about a quarter said they had started their back-to-school shopping, it said: “Of those who had not started, 41% said they were waiting for sales and 56% don’t plan to start back-to-school shopping until August.”

Despite the “changing market” for PCs, Microsoft continues to see more PCs shipped than pre-COVID-19 pandemic, and it’s “taking share,” said CEO Satya Nadella on an earnings call Tuesday for fiscal Q4 ended June 30. “We are seeing higher monthly usage of Windows 11 applications with increased time spent across creative work, collaboration, gaming, media and writing code as people rely on the PC for its unique productivity capabilities, rich interactive experiences and to stay connected,” he said. The “extended production shutdowns” in China due to COVID-19 that continued through May, plus the “deteriorating” PC market in June, “contributed to a negative Windows OEM revenue impact of more than $300 million,” said Chief Financial Officer Amy Hood. Revenue in Microsoft’s personal computing segment was up 2% year over year to $14.4 billion, she said: “Segment results were below our guidance range.” Microsoft sees its Windows OEM revenue declining by high-single digits in its fiscal Q1 ending Sept. 30, assuming that “the trends we saw in June continue through Q1,” said Hood.

Consumer intentions to buy new TVs were flat in July compared with June, according to preliminary Conference Board data released Tuesday. The board commissioned analytics firm Toluna to canvass 5,000 U.S. homes through July 21, finding 10.1% plan to buy a new TV set in the next six months, down from 10.4% in June, 11.4% in May and 13% in July 2021. Consumer confidence declined in July for the third straight month, though by a lower magnitude than in June, said the board: “Concerns about inflation -- rising gas and food prices, in particular -- continued to weigh on consumers. As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July.”

More than six in 10 U.S. consumers plan to reduce buying from brands that decrease product size (“shrinkflation”) or lower quality (“skimpflation”) to cut costs amid historically high inflation, reported Gartner Monday. The analytics company canvassed 252 consumers in June, finding three-quarters expect inflation to persist through the end of 2022, and 65% expect to cut back on purchases or stop buying altogether in at least one product category, it said. Consumer tech goods didn’t escape blame, said Gartner. The survey found 18% of respondents expressed dismay about price increases in personal and home electronics, and 7% were unhappy with the skimpflation they noticed in consumer tech products through the use of cheaper components and materials, said Gartner.

Snap’s Q2 revenue grew 13% year over year to $1.11 billion, substantially lower than the 50% compound annual growth rate in revenue since it became a public company in 2018, said Snap's investor letter Thursday. The disclosure sent the stock plunging 39.2% Friday to close at $9.96. Snap has been fending off “macroeconomic challenges” since late in 2021's Q4, said Chief Financial Officer Derek Andersen on an earnings call Thursday. “While there have been lingering supply chain and labor supply issues impacting certain segments that began during the pandemic, more recently, we've seen the impact of persistently high inflation, then rising interest rates and rising geopolitical risks associated with the war in Ukraine,” said Andersen. The various headwinds are putting pressure “on the earnings of a wide variety of companies, and this is directly impacting the demand for advertising,” he said. As many industries and verticals have come under “top line or input cost pressure,” ad spending has been among “the first areas impacted,” he said.

Though American Express is “wary of the uncertainties” in the current economic environment and the impact it's having on the business, Q2 revenue grew 31% year over year, reaching a record $13.4 billion, said CEO Stephen Squeri on a quarterly earnings call Friday. The “historically low” U.S. unemployment rate “is a positive factor, as it's helping to drive our strong credit metrics, and we continue to see no significant signs of stress in our consumer base,” he said. But inflation “is a bit of a mixed bag,” said Squeri. “It's a modest contributor to our strong growth in volumes, but inflation when combined with low unemployment also puts pressure on operating costs,” he said.