00:00What is kind of the overall consensus about the impact the tariffs are having from retailers and are they passing on higher prices onto the consumer yet?
00:12Yeah, I think most of the retailers we've tracked have said they're really trying not to.
00:16But yes, some of those higher prices have trickled in.
00:19As we know, the tariff and trade policy picture has changed quite a few times this year.
00:24Just last week, there was another pause on Chinese tariffs.
00:27So a bit of a sigh of relief there.
00:29But we're still seeing Chinese tariffs on imports from China 30%, whereas prior to this year that we didn't have tariffs of that size.
00:39So a lot of these retailers are still contending with those.
00:42But again, relieved that they haven't gone up to some of the percentages that we've heard thrown around 125%, 145%.
00:50So we have a pause until November.
00:52We'll see what happens at that point.
00:54So it's still a bit of an uncertain picture for retailers because they're not sure what happens come November.
00:59But they're trying to prepare as best they can.
01:01Like I said, some of these are negotiating with suppliers.
01:04They're trying to move countries of production.
01:07They're trying to move away.
01:09Target, for example, just in 2017, 60% of their imports were from China.
01:15And they've gotten that down to 30%.
01:17And they said by the end of next year, expect that to be closer to 25%.
01:21So retailers are trying to, as quickly as they can, move supply chains.
01:24But as you know, it takes time.
01:26But many of them had said, yes, this will creep into pricing.
01:29And we started to see that.
01:31And we're starting to see consumers a bit fatigued with the increase in prices as well.
01:36How strong is the consumer based on what these retailers have been saying?
01:40You know, like I said, it depends which retailer you look at.
01:45I think the consumer has been surprisingly resilient in the face of a lot of this.
01:50I think the one thing that concerns me the most is the labor market.
01:53We know that the consumer will roll with inflation and higher prices.
01:57We've seen it, you know, really in the wake of COVID.
02:00We've been dealing with higher cost of items, right?
02:03But it's because, for the most part, folks have felt comfortable that they can keep their job.
02:11If they, you know, needed to get a new job, they'd have the ability to find another job.
02:15And that their employment is safe over the next 12 months or so.
02:18Now that we're seeing the labor market, non-farm payrolls a couple weeks ago for July came out.
02:23And they were weaker than expected.
02:25We had revisions to the June and May numbers.
02:29Unemployment is still historically very low at 4.2%.
02:32But we're starting to see a few cracks in the jobs picture.
02:36And I think that's where you start to see consumers get a little nervous and hold back a little bit.
02:42We are in the back-to-school shopping season.
02:44So we've seen retailers talking about that.
02:47Consumers are still coming out for that.
02:49Maybe not in the record droves that they did last year or even 2022.
02:54This is the second largest shopping season outside of the winter holiday season.
02:58And so they're still here, but I think they are, again, looking for value and looking for a bargain.
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