Consumers track spending closely as inflation cools, Walmart shares plan to raise prices

RALEIGH, N.C. (WTVD) -- Walmart, the world's largest retailer, announced it will raise prices as a result of tariffs, as its first quarter profits fell.

The moves came just days after a new report showed cooling inflation, hitting its lowest mark in four years. Jeremy Petranka, a Senior Associate Dean at Duke University Fuqua School of Business, referred to that as a lagging indicator.

"(When) we actually want to know what's going to happen, you start looking at lead indicators. So instead of, for instance, what consumers are paying, you look at what businesses are paying as they're getting shipments in. A lot of the tariffs are put into place are just now going into effect," Petranka explained.

In response to Walmart's announcement, the White House released a statement.

"All recent inflation data-from consumer prices to producer prices-have come in below expectations. Meanwhile, private demand growth and job creation remain healthy," White House spokesman Kush Desai said. "Through tariffs and more balanced trade deals, rapid deregulation, and massive tax cuts, the Administration remains committed to further reducing the cost of living for American families and delivering greater prosperity for American workers."

Data from the Bureau of Labor Statistics showed that while most beef prices increased slightly month-over-month, egg prices fell by nearly 18%, though still remain elevated from a year ago.

"I'm cutting back on my spending. I try to buy stuff now, so when I cook, it will last me 2 to 3 days, so I don't have to cook again," said Harry Jones, who lives in Raleigh.

"I'm spending almost $200 in less than a month, and I don't need a lot," said Deborah Whitaker, who lives in Raleigh.

Whitaker does not have a vehicle or live within walking distance to a supermarket, so she needs to use a bus or delivery services to access food.

"My granddaughter taught me how to do (the delivery apps), but it costs you so much more to do it that way," said Whitaker, who wants to see a supermarket open in downtown Raleigh.

Jones does have a vehicle, but is trying to limit trips.

"(I plan to) start buying in bulk because I can't keep running to the grocery store every week or every other week just to get the things I need," said Jones.

Whether prices increase moving forward could be based on whether the United States can land deals with countries on tariffs.

"You actually see (businesses) holding a large amount of inventory. Once that's out, and they actually now have to buy the more expensive things, you're going to see it kick into gear," said Petranka.

Petranka explained that some businesses have hedged in their planning around tariffs, as long-term projections are affected by uncertainty.

"If it was something that looks like bring the tariffs down and then (the United States) wants to target particular industries, maybe countries, it's a gradual (pace to) put them into place, then you would see a much smoother transition and companies and businesses would feel like they know what the next six months or a year is going to look like," said Petranka.

Further, he projects a logistical challenge in handling tariffs.

"Customs has not traditionally been built for this level of being able to collect tariffs at ports of entry," Petranka explained, sharing the possibility of supply chain disruptions.

One industry particularly affected by economic conditions is tourism. Last year, North Carolina was the fifth-most visited state, and saw a record amount of tourism spending.

"Anytime you have economic uncertainty, one of the first things that (people) stop spending on (are) things like vacations, things they don't need or they figure out a cheaper way to do it," said Petranka.

Federal Reserve Chair Jerome Powell delivered remarks Thursday at the Second Thomas Laubach Research Conference in Washington, D.C., in which he discussed interest rates.

"The economic environment has changed significantly since 2020, and our review will reflect our assessment of those changes. Longer-term interest rates are a good deal higher now, driven largely by real rates given the stability of longer-term inflation expectations," Powell said. "Many estimates of the longer-run level of the policy rate have risen, including those in the Summary of Economic Projections.

"Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s," he added. "We may be entering a period of more frequent, and potentially more persistent, supply shocks -- difficult challenge for the economy and for central banks."

The Federal Reserve is set to hold its next meeting June 17-18.

According to Gas Buddy, gas prices in Raleigh have increased about 20 cents per gallon in the past two months, though they are still down nearly 50 cents per gallon compared to the past year and remain below national averages.

The announcement of a reduction in and delay of tariffs on products from China sent markets soaring Monday, as the Dow, Nasdaq, and S&P 500 have largely rebounded from their sell-off, now all hovering around their levels from January.