Key Points: Investors in consumer stocks need to navigate a few crosscurrents. Earnings quality is poor with employment growth being driven by acyclical sectors and incomes being propped up by entitlements. A crackdown on immigration, tariff-induced inflation and stepped-up student debt collection may create some turbulence in the months ahead. At some point, fiscal stimulus will come to the rescue. There might be a good way to trade around each of these events, but our

It’s almost impossible to have a discussion about the consumer these days without a thorough understanding of government policy. Our recent reports and webinars have touched on tariffs, immigration and fiscal policy. This report focuses on household balance sheets with a particular emphasis on student debt. Government and the consumer are tied at the hip. Transfer payments have been accelerating and are adding a full point to personal income growth. Government employment has been responsible

Key Points: Rubinson Research has been in business for a little over three years. We were super bullish on the consumer in 2022, 2023 and most of 2024. We turned cautious last fall, but we’re striking a more neutral tone today. Join us for a webinar this Thursday to discuss the findings of this report and many other subjects. We model the risk posed by tariffs from the top down and the bottom up. Figures

Key Points: Immigration was among the markets primary concerns before tariffs stole the show. We think it’ll re-emerge as a key talking point before too long. Immigration has been contributing almost a full percentage point to population growth, triple its normal contribution. We analyze border crossings, work permit applications, and state-level employment dynamics to understand the effect reduced immigration might have on employment and aggregate demand. Traditional labor market surveys do not do a good

Key Points: “Liberation Day” sparked a dramatic selloff, but we think there are other reasons to be concerned about the consumer. Employment growth is lopsided, PCE growth has been of low quality, immigration will soon begin to weigh on aggregate demand, real wages are already slowing, and the “wealth effect” is reversing. The market’s knee-jerk reaction was to snap up consumer staples. We think housing-related stocks are the better bet. The existing home market has

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