From Top Electric.

THE U.S. ECONOMY IS COLLAPSING – Costco Just WARNED! Costco’s Q2 2025 earnings report has sent ripples through Wall Street, revealing troubling economic trends. Despite a 4.2% revenue increase, same-store sales grew by only 1.7%, missing analysts’ 3.5% forecast, triggering a 5.8% stock drop in after-hours trading. The retail giant, with over 850 global locations and a 93% membership renewal rate, is witnessing a shift in consumer behavior. Shoppers are prioritizing essentials, with a 6.8% decline in big-ticket items like electronics and a 4.3% rise in necessities. Inflation is eroding purchasing power, making consumers increasingly value-conscious, even at Costco, known for competitive pricing and iconic deals like the $1.50 hot dog combo. Foot traffic fell 2.3%, the first decline in four years, and executive membership renewals dropped to 90%. These shifts threaten Costco’s model, reliant on membership fees for 75% of operating income. The broader retail sector mirrors this distress, with Bed Bath & Beyond closing 45 stores and Best Buy laying off 3,500 workers. Layoffs at Intel (15,000 jobs) and Goldman Sachs (3,200) signal a deepening downturn. Consumer confidence has plummeted, with the Consumer Confidence Index recording its largest monthly drop since August 2021. Persistent inflation, defying the Federal Reserve’s 2% target, fuels economic uncertainty. A Morgan Stanley survey shows 68% of Americans plan to cut discretionary spending. Costco’s struggles highlight a cautious consumer base, a leading indicator of economic trouble. Individuals are urged to reduce debt, diversify investments, and consider inflation hedges like precious metals. As retail and corporate layoffs mount, preparing for a prolonged downturn is critical.

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