- In today’s CEO Daily: Diane Brady on the rise of Ulta Beauty CEO Kecia Steelman.
- The big story: The Mamdani era begins in NYC.
- The markets: Down, with big drops in Asia.
- Plus: All the news and watercooler chat from Fortune.
Good morning. There was an unusual line at the grocery store across from our Manhattan office yesterday, in part because the self-service checkout was not accepting Electronic Benefits Transfer or EBT payments. Customers were confused over SNAP benefits that remain in limbo amid the government shutdown, the teller explained. People were going through the checkout and abandoning cartloads of food when payments didn’t go through, resulting in lost revenue for the store and lost productivity as workers had to put everything back, not to mention the sad fact that some SNAP recipients did not have alternate ways to purchase those items.
Consumer spending plays an outsized role in the U.S. economy, accounting for roughly 70% of GDP versus less than 50% in countries like China, Germany, and Saudi Arabia. And transfer payments to consumers often translate to revenue for U.S. business, whether that’s the 250,000 stores that accept SNAP payments or the hospital systems that rely on revenue from Medicaid and Medicare. That doesn’t impact the debate about reforming such programs, but it’s a reminder that the vaunted resilience of the U.S. consumer and wealth effect from stocks is limited to relatively few.
The top 10% of U.S. earners now drive half of all consumer spending. Meanwhile, the bottom tier of earners are driving the rise in credit card debt to a record high of $1.33 trillion. 56% of households earning less than $50,000 carry a balance from month to month. A prolonged shutdown—already the longest ever—will widen that divide.
This week’s conversation with Ulta Beauty CEO Kecia Steelman on Fortune’s Leadership Next podcast is a reminder that America’s strength comes from enabling those who face great hardship to achieve great heights. Steelman says she grew up “poor, hungry and determined” in Mediapolis, Iowa, getting pregnant as a teenager and working her way up from being a floor associate making $8 an hour at Target to running the country’s largest beauty retailer with some 1,500 stores. “Being really grounded and humble with my beginnings, I wouldn’t change that,” she told Kristin Stoller and me during a conversation taped at the recent Fortune Most Powerful Women Summit in Washington. And she’s thankful that she spent the first 12 years of her career at Target: “They really invested in you as an individual and it’s where I honed my leadership skills.”
You can check out our conversation on Apple or Spotify.
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Contact CEO Daily via Diane Brady at diane.brady@fortune.com
