Pet adoptions are declining as more Americans return to the office — and that's taking a toll on pet product sellers, Nathan writes.

State of play: Online pet product seller Chewy this week lowered its revenue outlook and swung from net income of $2.3 million in the year-ago period to a net loss of $35.8 million in its most recent quarter.

• Pet adoptions — which spur purchases of new pet products — are down 16% year over year, Chewy CEO Sumit Singh told investors on Wednesday.

What they're saying: "Right now, pet household formation is muted, and it's muted because of the high kind of pressures that consumers are seeing from every direction," Singh said.

The impact: Shares of Chewy and Petco are down more than 46% and 63%, respectively, in 2023, bucking the overall stock market's strong showing.

• Chewy cut an unspecified number of jobs in November.
• Bank of America analyst Curtis Nagle said in a research note that investors should "not expect" Chewy to outline "new, material near-term revenue drivers" as the company grapples with declining rates of pet ownership.

Zoom out: Employers are increasingly demanding that employees relinquish remote-work arrangements, making it more difficult to care for pets.

• Inflation has also taken a toll, prompting many pet owners to trade down on items.

The big picture: For pet retailers, it's a return to the old normal.

• Chewy's stock had skyrocketed by over 300% during the pandemic pet boom, from the start of 2020 to its peak in February 2021, and now it trades below where it stood at the start.
• Petco, which IPO'd at the beginning of 2021, is off more than 87% from its debut.

The "vibe-cession" is on hold: American consumers felt much better about the economy in early December, Axios' Courtenay Brown writes.

• So says the University of Michigan's widely followed consumer sentiment index, which jumped a whopping 8 points from the prior month.
• It was the first increase in four months, with broad improvement in sentiment across all age groups and political affiliations.

Why it matters: A key question has been why Americans felt so down about the economy when key indicators — cooling inflation, boom-like economic growth and healthy jobs growth — have been so strong.

• Those gloomy consumer vibes have political implications: voters remain dissatisfied with the Biden economy, which by most other measures looks solid.

Of note: Inflation expectations for the year ahead were 3.1%, the lowest since March 2021 — a big drop from the prior month's 4.5% that was enough to fuel a stock market rally.

The caveat: The survey — based on a small sample of roughly 420 consumers — is preliminary and will be finalized in the coming weeks.

🛢️The FTC is reviewing whether Chevron's proposed acquisition of Hess is anti-competitive. (Reuters)

🔐 Honeywell announced a $4.95 billion acquisition of air-conditioning maker Carrier Global's security division. (Axios)

The FDA today approved the first therapy based on CRISPR gene-editing technology to address the painful effects of sickle cell disease, Axios' Adriel Bettelheim writes.

• Getting the nod was Casgevy, from Vertex Pharmaceuticals and CRISPR Therapeutics, a one-time treatment for patients 12 years and older.

Why it matters: The technology could be applied beyond the estimated 100,000 Americans with sickle cell to other blood disorders like hemophilia, as well as certain cancers and infectious diseases.

• But gene therapies are costly, with million-dollar price tags for some products.
• The Institute for Clinical and Economic Review, which advises payers, estimated an appropriate price for Casgevy would be between $1.35 million and $2.05 million per patient.

The Mouse wants to build you a house, Axios Raleigh's Zachery Eanes writes.

• Storyliving, a housing developer owned by Disney, announced it's building a 1,500-acre, 4,000-unit community called Asteria in Pittsboro, North Carolina.

Details: The neighborhood, which will offer both single-family homes and apartments, will feature Disney-themed activities and events.

The big picture: This is the second Disney-backed community to be announced.

"We had started to rely too much this year on self-checkout in our stores."