Key Points: Spending on leisure has begun to recover, but if the category’s PCE share were to return to trend, revenues would grow +10-12% in each of the next two years. That’s more than double the pace of overall consumption, and it doesn’t even presume a recovery of sales that were lost during the pandemic. We think leisure stocks have legs.
Key Points: Over the past year, the market was convinced that higher rates would derail the consumer, but that’s not what happened. The debate is likely to get turned on its head this year – some are suggesting that falling rates will stimulate consumption, but we’re not taking the bait just yet.
Key Points: We’ve been bullish on the consumer for the past two years and at the same time, we’ve been skeptical that the low-end would be able to keep up. Stocks that cater to the low-end have indeed underperformed, and our sense is that investors have written the cohort off as a problem child. We’re starting to see reasons for optimism. Our original concern was that the low-end ran through “excess savings”, but that’s one
Key Points: The auto industry missed out on selling 9 million units over the past few years. The question we have is whether that pent-up demand will ultimately surface, or remain latent. This report assesses demand trends, supply dynamics, and credit conditions with the aim of understanding where the auto cycle is headed. We suspect that usage will factor into the replacement cycle. Miles driven are still (5)% below normal, and by our count, the
Key Points: The consumer has stood strong in the face of meaningful headwinds, and we think they’ll continue to hold up well in 2024. The uptick in credit card delinquencies seems to run counter to our thesis, so the aim of this report is to understand why delinquencies are moving in the wrong direction, and what that might mean for PCE in the year ahead. A little over a year ago, credit card balances eclipsed
Key Points: The housing market is typically the Fed’s most reliable transmission mechanism, and while housing activity has slowed markedly, the tack-on effects have yet to sink the economy or the consumer. Housing is a complex subject, and there’s no shortage of data to analyze. We focus our energies in this report on demographics, the normalization of pandemic effects, spending on home improvement, and the labor market. Housing turnover has reacted to rate hikes much
Today we caught up with Ted Decker, the CEO of Home Depot. We talked about the health of the consumer, the state of the housing market, the “lock-in” effect, AI, and more. I asked how long the hangover in COVID-friendly categories like BBQ grills, outdoor furniture and washing machines might last. He compared the dynamic to a hurricane, which made…
Conversations with CEO/CFOs: We added a new feature to our “Up-to-Data” podcast series. This week’s issue features a 30-minute conversation with Ed Bastian, the CEO of Delta Airlines. Ed has led Delta’s employees, customers and shareholders through some turbulent times. In the process, he and the rest of the Delta team have built trust with customers (empathy), employees (no furloughs),…
This installment of our “Up-to-Data” podcast is more comprehensive than most. We take a step back to see what the latest data are telling us about the consumer. We cover the labor market, excess savings, the wealth effect, goods vs. services, household balance sheets, inventory dynamics, the housing sector, and leisure. Coming soon: Conversations with Corporate Execs. Many of our…
The Presidential election is not far away, and this installment of our “Up-to-Data” podcast explores how policy might influence consumer behavior. When it comes to policy, there’s a lot to consider, and we’re especially attuned to distributional shifts that could occur as a result. The presentation also takes stock of household balance sheets, including the supply of credit. Finally, we…
We’ve analyzed a ton of new data over the past week. Issue #4 of our podcast makes sure you are up to date. It walks you through incremental data from the Fed’s Senior Loan Officer Survey, April retail sales, e-Commerce penetration, Capital One, Discover Financial, Home Depot, the New York Fed’s household debt and credit report, the San Francisco Fed’s…
In issue #3 we analyze immigration, excess savings, and the low-end consumer. Immigration has been a big contributor to the labor force, and with elections in the offing, it presents more than a trivial risk. We track the amount of construction put into place due to the CHIPS Act. We also offer an analysis of the US mattress industry. We…