Bank of America recently reported that the consumer is in great shape, sending the stock market through the roof. This is inconsistent with government data which is outlined in the chart below. Here we see indexes (starting at the 100-level beginning with the onset of the 2008 Great Recession) measuring the increase in personal interest payments (including credit card payments), personal consumption expenditures, and the personal savings rate. Not surprisingly, we see personal consumption expenditures up substantially (reflecting massive inflation), personal interest payments approaching covid lockdown highs, and a savings rate that is back to the Great Recession starting level (consumers are forced to tap their savings during recessions). In conclusion, this chart points to the need to rescue consumers with a greater supply of goods at lower prices and lower interest rates.
How to Accurately Assess the Consumer?
Jack in the Box results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night.
The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?
A Restaurant Research LLC Company