Key Points: Companies have begun to signal that 2025 is off to a rough start. We’ve heard rumblings of a weaker consumer before, but our math said they would power through, and they did. This time feels different. The effects of immigration and DOGE on the job market have yet to take hold. We see a (0.5)% headwind to PCE from immigration and a (0.2)% impact from DOGE. On a probability-weighted basis, we see a

Key Points: A year ago, we penned a report on Amazon called “Squeezing Blood from a Stone”. The implication was that after years of spending aggressively, Amazon was determined to increase the productivity of its existing asset base. The theme applied equally to the retail business and AWS, but Amazon now appears to be embarking on a new investment cycle. We dive headfirst into the fundamentals of Amazon’s retail business and its AWS arm to

Key Points: Over the past five years, the consumer has been unflappable. After such a strong showing, we might expect fatigue to set in, but the spending data is actually getting stronger, not weaker. We want to know if this performance is sustainable. To that end, we analyze how consumers might fund future spending growth. We dig into their sources of funds, including labor income, savings, and wealth, but our focus is on the credit

Key Points: Assessing the labor market has been like nailing Jell-O to the wall. Revisions, immigration and falling survey response rates have confounded the data, making the task of forecasting even more complicated than normal. In this report, we aim to navigate the noise using unconventional analyses and a ton of academic research. Our first task is to determine the underlying trend in monthly payrolls. Without that, it’s hard to anchor a forecast. We use

Key Points: Consumers have been prioritizing experiences over things. The pandemic upended everything, but that theme is now back in full swing. Leisure stocks have been on a roll as a result. They’ve outperformed the market by 15% over the past year and 60% over the past two years. This report explores the fundamental and tactical appeal of those stocks. The secular outlook for leisure demand is strong. Leisure spending over-indexes to high-end consumers, and

Key points: It wasn’t long ago that economists were bracing for a hard landing. Today, the markets are having a party. The consumer accounts for 70% of GDP, and we think they’re a bit off kilter. While growth has been good, we find that gains in both the labor market and PCE have been narrowly focused, and that doesn’t inspire confidence. Labor markets are in flux – demand for labor has already slowed and immigration