Axios Closer

May 17, 2022
👋 Welcome back! We won't look at our credit card balance if you won't.
Today's newsletter, edited by Pete Gannon, is 698 words, a 2½-minute read.
🔔 The dashboard: The S&P 500 closed up 2.0%.
- Biggest gainer? Paramount (+15.3%), after Berkshire Hathaway disclosed a $2.6 billion stake.
- Biggest decliner? Walmart (-11.4%), following a major earnings miss.
1 big thing: Still spending
Illustration: Brendan Lynch/Axios
Americans keep spending despite worrying about inflation, Hope writes.
Why it matters: It’s another sign that the underlying economy remains relatively strong even as fighting inflation is now President Biden's "top domestic priority."
- Fed chair Jerome Powell said today he wouldn't hesitate to keep raising rates until inflation comes down.
Driving the news: Walmart, the biggest U.S. retailer by revenue, missed on quarterly earnings but beat expectations with sales and bumped its top-line forecast for the year.
- Home Depot today also raised its outlook for the year as it reported its largest ever first-quarter sales.
- Retail sales in the U.S. — which include online, stores and restaurants — grew 0.9% overall in April from March compared to a 0.3% rise in the Consumer Price Index, government data out today shows.
What they’re saying: “Given this show of strength from consumers, speculation that the US economy is in danger of an imminent plunge into recession [looks] badly misplaced,” Paul Ashworth, Capital Economics’ chief North American economist, noted.
Yes, but: Higher costs — for both businesses and consumers — are taking their toll.
- Walmart, for example, reported a nearly 25% drop in net income last quarter compared to last year due in part to rising fuel and food costs.
- Credit card usage among consumers has been steadily rising this year and is expected to keep rising.
Meanwhile, both Walmart and Home Depot customers spent more in the quarter, but they didn't shop more.
- Walmart reported a 3% increase in comparable sales for the quarter over last year, but the number of transactions was flat.
- Home Depot actually saw transactions fall 8.2%.
💬 Hope's thought bubble: Inflation's fingerprints are all over this. Rising prices likely helped push sales receipt values up as visits decreased.
What to watch: Target and Lowe’s report earnings tomorrow.
2. Charted: Crash fatalities spike despite safer cars

The number of people killed in vehicle crashes on U.S. roadways hit a 16-year high in 2021, Nathan writes.
- An estimated 42,915 people died in crashes last year, up 10.5% from 2020 and up 32.1% from the low mark in 2011, according to estimates released Tuesday by the National Highway Traffic Safety Administration.
Why it matters: We're trending in the wrong direction at a time when cars are supposed to be getting smarter and safer, with consumers increasingly depending on driving assistance technology.
Between the lines: Car safety experts suspect that distracted driving is playing a role in the spike, though it's hard to say how much due to the difficulty in obtaining data on the topic.
Yes, but: Cars are still much safer than they were decades ago, sporting improved crashworthiness, airbags and crash avoidance technologies.
- In 2021, 1.33 people were killed per 100 million miles traveled. That's down from 4.46 in 1971.
4. Tweets about Twitter
Photo illustration: Sarah Grillo/Axios. Photo: Liesa Johannssen-Koppitz/Bloomberg via Getty Images
Elon Musk continued his campaign against the company he agreed to buy, now calling on the SEC to investigate Twitter's claims of bot percentage.
Catch up quick: Musk this morning tweeted that his bid "cannot move forward" unless Twitter publicly proves its claim that less than 5% of its accounts are spam or bots, Axios' Dan Primack writes.
- Twitter shares today closed up 2.5% at $38.32, still well below Musk's $54.20 cash offer.
The bottom line: Musk is radiating runaway bride vibes, while Twitter continues to stand awkwardly at the altar.
Go deeper with Axios Pro Rata.
5. Cinnadust inspiration
Photo: Conagra Brands
The leftover milk after a bowl of Cinnamon Toast Crunch is so tasty that it's the inspiration for a new beverage, Nathan writes.
What's happening: Conagra Brands is collaborating with General Mills to introduce Swiss Miss Cinnamon Toast Crunch Cinnamilk, a hot drink mix.
Details: Each $2.99 box has enough for six drinks.
💬 Nathan's thought bubble: I was practically addicted to Cinnamon Toast Crunch in college and had to give it up — cold turkey. Haven't touched it since.
- And that may change.
6. What they're saying
"[We] would have had to shut the airline down."— United CEO Scott Kirby told Hope at an event in New York yesterday, referring to what would've happened had the first CARES Act not passed two years ago.
Thanks to Sheryl Miller for copy editing today's (and every day's) newsletter.
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Catch up on the day's biggest business stories and look ahead to important trends. Led by Nathan Bomey.


