C&R sector M&A declines with uncertainty about the economy []

The Federal Reserve’s determination to rein in inflation by ratcheting up interest rates has cast a Siberian chill over the consumer and retail sector (C&R). Many C&R firms have scaled back planned M&A in response even though robust retail sales surpassed expectations, suggesting a recession this year is not inevitable.

KPMG economists said that the U.S. economy clearly has entered a period of volatility and contraction, but the strength of the consumer and industrial production mean the chances of an economic downturn lessened. M&A is more forward-looking, however, and many C&R firms have reduced plans for M&A until the economic picture becomes clearer.