The changing American consumer

Asked recently about Amazon’s sprawling network of warehouses, Brian Olsavsky, the firm’s finance chief, did not mince words. “We have too much space right now.” As consumer demand surged during the pandemic, the online retailer doubled its capacity from 193m square feet (18m square metres) at the end of 2019 to 387m square feet two years later. Today it has a glut, which the company says is costing it tens of millions of dollars a day.

Retailers are bracing themselves for a slowdown as central banks raise interest rates. But Amazon’s troubles reflect another crucial development for the global economy: a shift in spending from goods back to services, reversing a pandemic-era trend. This switch should ease pressure on global supply chains and lower inflation. But it has been slow and uneven.