Today’s lesson: What the critical back‑to‑school season tells us about the state of the consumer, and in turn the economy. Spending on K‑12 and back‑to‑college combined is expected to hit a record of nearly $147 billion, according to the National Retail Federation.

But in what may be a sign of the strains shoppers are under, they’re searching for cheaper goods and supplies. We’re still early in the season but we found this week that two of the nation’s biggest retailers, Walmart and Target, are racing to accommodate them.

Customers are responding to just absolutely fantastic investments in price, said Walmart’s U.S. CEO David Guggina during the company’s earnings call that highlighted the cost pressures facing consumers. We have a list of 14 key items that are priced less than what we saw in 2019, he also said of the store’s school supplies, citing examples from the store’s Pen+Gear brand, which has crayons for 25 cents and No. 2 pencils for 92 cents. Those prices are resonating with customers and we’re seeing it in traffic, ticket and unit volume all growing.