Business, Finance & Tech
Americans are still spending, but they’re spending smart
(CNN) — In this Jekyll and Hyde economy, Dr. Jekyll is winning this week. (Hint. He’s the good guy.)
July’s retail sales data from the Census Bureau added to a picture emerging of an American consumer still spending even amid biting inflation and lousy sentiment. July retail sales were unchanged from June, but retail sales excluding autos and gasoline rose a healthy 0.7%.
“In one line: If you’re looking for recession, you won’t find it here,” wrote Ian Shepherdson of Pantheon Macroeconomics in a note to clients. “The July retail sales report made it clear that the U.S. consumer is rather more willing to spend than you might expect if you spend much time wallowing in the misery of the recession-obsessed media,” he said.
That recession obsession has faded a bit over the past 10 days or so amid continued signs of labor market strength, falling gas prices and hints that runaway inflation may be peaking. (The latest weekly jobless claims out this morning edged lower to 250,000, a sign the labor market is still strong.)
“Summertime and the living is easy for consumers where most are fully employed with the lowest unemployment rate in the nation’s history,” wrote economist Chris Rupkey of FWDBONDS. “They have paychecks and are still spending them, and maybe holding a little back for more cars to come to the dealer lots.”
Falling gasoline prices have allowed consumers to spend those savings elsewhere and they are spending wisely. Walmart’s CEO and others have said consumers are trading down, focusing on necessities: less steak cuts, more low-cost chicken, hot dogs and processed tuna. Many of the things they bought in the early days of the pandemic (dishwashers, couches, PJ sets) they aren’t buying now, and those things are being discounted like crazy (see Target!) which is also good for savvy consumers.
Bank CEOs have said on their earnings calls that checking accounts are still in good shape and household balance sheets are better than they were in the 2008-09 crisis.
And Goldman Sachs this week said consumers have $2.2 trillion in Covid relief still in their bank accounts, ready to deploy.
But John Leer, chief economist for Morning Consult, told me the consumer strength is uneven.
“We really do see a divergence between high income adults and middle and low income adults,” he said on CNN’s Early Start. “I think a lot of the spending growth that we’ve seen over the last year has been driven by folks making $100,000 or more per year.”
It might be why consumer sentiment surveys and polling show the public feels pretty lousy about the economy. And it’s anyone’s guess how long the mighty consumer can keep flexing their muscles. Rising interest rates will make financing a new car, home, student loan or credit card debt more expensive. The Fed is expected to keep raising interest rates to try to cool inflation, making debt even more expensive in the months ahead.
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
By: Ceci Partridge
August 23, 2022
Latest Instagram Posts
Who makes the NBC Top 3, winner will be announced Sunday night on NBC Palm Springs, with the player who makes the number one spot winning a $250 prize from @hondaofthedesert! Comment below if it will be 1) Xzavier Hernandez with the dot towards the back of the endzone, 2) Jesse Rodriguez with the 50 plus yard TD throw, 3) Trace Vargas with the diving TD, 4) Ryan Rumsey with the screen pass TD, making guys miss, or 5) Moyses Aguilar with the pick #fyp #fnl2026 #hondaofthedesert #highschoolfootball #fridaynightlights
Drop your thoughts in the comments 👇 #therogginreport #coachellavalley #localnews #explore #nbcpalmsprings
⚡️ TOP STORY: A man is recovering after he was struck by lightning. Firefighters battled a brush fire along Snow Creek Road, while another lightning strike in Chino Canyon sent a man to the hospital. If you hear thunder, stay indoors for at least 30 minutes after the last rumble. #PalmSprings #Lightning #FireSafety
🚨 Chasing that year-round “summer glow”? A social media tanning trend involving the unapproved peptide melanotan-2 is raising serious safety concerns. Dermatologists say safer sunless tanning options are available. ☀️ #YourHealthToday #SkinHealth #Melanotan2 #TanningSafety
Palm Springs firefighters responded Thursday to a report of a person struck by lightning in the Chino Canyon area. The person was transported to a hospital for medical treatment. Firefighters also responded to a palm tree fire in Chino Canyon that officials say was caused by an apparent lightning strike. NBC Palm Springs News Director David Reese is in the neighborhood tonight knocking on doors and trying to learn more about what happened. Did you see the lightning strike? Did you hear or see anything unusual? Do you know who was struck or have information that could help us understand what happened? We’d like to hear from you. Send us a DM here or contact NBC Palm Springs if you witnessed the incident or have information to share. #PalmSprings #ChinoCanyon #Lightning #PalmSpringsNews #NBCPalmSprings CoachellaValley BreakingNews
Fred Roggin’s response? Show us the receipts! #therogginreport #coachellavalley #localnews #explore #nbcpalmsprings
A $557k budget shortfall … so why do they need $11.3 million in new taxes? Are you voting Yes or No on Measure P? #therogginreport #measurep #localnews #coachellavalley #nbcpalmsprings
School board trustee wears “FAFO” shirt to court deposition. Drop your thoughts in the comments 👇🏽 #therogginreport #coachellavalley #localnews #explore #nbcpalmsprings
Estevan Figueroa of King’s Club Barbershop is giving back across the Coachella Valley — one haircut at a time. He and his team recently gave dozens of free haircuts to kids at the Boys and Girls Club in Cathedral City. Figueroa also provides clothing, essentials and encouragement to people in need. Inspired by lessons from his father, he’s now started a nonprofit to help even more people in the community. “Look good, feel good.” @barbercipactli Read the full story at NBCPalmSprings.com.
9 months. 5 deposition notices. 1 no-show. What is this official hiding under oath? Let us know what you think in the comments 👇 #therogginreport #jesusgonzalez #localnews #coachellavalley #nbcpalmsprings