The outlook for consumer goods spending remains positive heading into the back-to-school season given signs from key economic and consumer indicators—including mostly healthy retail sales by channel.
The signs for the short term are distilled from the data storyboard below, which is based on economic sources and the consumer sentiment index created by MacroSavvy™ using data from Prosper Insights & Analytics™.
For a long-term outlook and forecast, see the post here.
GDP. Consumer gains were supported by investment spending (excluding inventory changes) that was sustained by businesses—although residential investment (i.e., the housing market) has turned flat. Exports also supported gains in advance of trade war effects that likely will become evident in Q3.
Jobs. Signs from job gains suggest the economic outlook may improve from a modest start to the year—despite trade and inflation-related threats. The job gains, however, remain skewed toward Western and some Southern states and metro markets. For more, see post here.
Prices. Consumer price inflation continues to slowly become a bigger threat—especially in the form of rising energy prices. Rising prices for services and food are adding to the threat. The threat likely will further squeeze consumer goods (i.e., retail), where prices continue to fall.
Confidence. Key to the outlook in the short term are Millennials, whose spending confidence remains on a strong upward trend. They have led consumers’ confidence to spend higher in recent months through July—with clothing and homegoods benefiting most. For more, see post here.
Retail & consumer goods. The sales trend through July remains stronger than year-ago periods but off the strong November-December holiday gains. Besides e-commerce, gains remain relatively strong at clothing, grocery, and mass stores—as well as at restaurants—while gains slow at homegoods stores.
For what the trends mean for the consumer goods outlook in the long term, see the product available here or at the view products link below:
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