In this chart, we subtract total quits from total hires. The excess of hires over quits looks very good relative to the historical level even though the positive gap recently dipped slightly. Workers are staying at their jobs longer even as they continue to have new employment opportunities.
Macro Insights
Part 3: Analyzing Performance of Low-Income Oriented Retail Companies
We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23.
Part 2: Incremental Interest Payments Squeeze Disposable Income
In this post, we quantify the pressure on disposable income driven by credit card & auto loan payment increases since the onset of the Fed rate hikes in early 2022 in addition to the impact of the coming resumption of student loan payments in October 2023.
Part 1: Keeping an Eye on the Consumer’s Top-Line
The consumer’s top-line benefits from a high employment rate, generous raises, and a healthy savings rate which indicates an income surplus.
Teenage Wasteland No More
The American youth (15 – 24-year-old) unemployment rate makes our country look downright productive compared to the rest of the world!
The Fight for Global Manufacturing Gets Personal
Post-covid U.S. exports of goods & services have skyrocketed as American companies have worked hard to onshore their supply chains, providing them with products to sell overseas. Correspondingly, U.S. imports from China have fallen considerably since late 2022 after China’s extended covid lockdowns left their American customers without product to sell.
China’s Deflation Looks Pretty Good Compared to U.S. Inflation
While the U.S. has been suffering from severe post-covid inflation, China’s prices have been spiraling lower. What’s up with that?
July’s Retail Sales Reveal Changing Consumer Spending Trends
Estimated monthly sales for retail & food services increased +8.4% on an annualized, sequential m/m basis during July 2023. While this looks great & helps explain the Atlanta Fed’s forecast for +5.9% 3Q23 real GDP growth, a closer look at the details reveals ongoing consumer struggles.
Part 2: Solid 2Q23 Results for Consumer Companies, But Not +5.9% Real GDP Kind
In our last post, we highlighted how the Atlanta Fed is now forecasting an astounding +5.9% y/y real GDP growth for 3Q23. In this post, we look at the 2Q23 financial performance of the largest retail consumer companies to triangulate actual results on main street with government forecasts.
Part 1: What Recession?
The Atlanta Fed’s GDPNow model is estimating a shocking +5.9% y/y real GPD increase for 3Q23 (official reporting date 10/26) which is notably adjusted for inflation. While this forecast is substantially higher than the Blue-Chip consensus estimates (the high-end of the range is still under 3%), it points to considerable retail strength…