A recent Wall Street report claims that the crackdown on immigration policy by the Trump administration is partly responsible for a decline in spending among Hispanic consumers. Researchers at Jefferies say that various consumer companies have flagged weak spending by such customers, and that uncertainty over immigration, rather than any kind of degenerating macro backdrop, appears to be the cause.
Businesses and consumers have criticized the more aggressive approach taken on immigration reform by President Donald Trump on the grounds of social responsibility. But, the new report indicates that the US economy could be adversely affected by the new policies. Firms including Wingstop, Foot Locker, and Target have flagged weakness in the spending of Hispanics during the last year. Brian Cornell, the CEO of Target, said that a change in behavior is being seen, especially in border towns, with such consumers choosing to stay at home rather than going out so often.
According to the Jefferies researchers, some firms who have a significant degree of exposure to Hispanic consumers have been explicit in citing a spending slowdown, and that many others are also likely to have been affected by the development.
But, there was some good news from the analysts. They noted that the spending weakness in Hispanic consumers was most likely a temporary situation and that it could even represent a purchasing opportunity for canny stock investors, offering the chance to increase sales via expanded distribution in the long-term.