Goldman Sachs The Markets Is the US consumer in trouble?
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Feb 28, 2025 Consumer sentiment in the U.S. is on a sharp decline, raising concerns about the overall strength of the consumer base. Factors like tariffs and job cuts are affecting spending patterns, with consumers leaning more towards services than goods. Investment opportunities in health and wellness, travel, and grocery sectors are emerging amidst these changes. Despite challenges, shopping behaviors remain resilient, showing optimism for better weather and upcoming job reports could boost retail performance and economic confidence.
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Declining Consumer Confidence
- Consumer sentiment surveys show declining confidence, marked by the biggest month-on-month drop in four years.
- Consumers express concerns about tariffs and rising inflation expectations.
Slowing Consumer Spending
- While company earnings remain generally positive, first-quarter commentaries indicate a slowdown across various consumer markets.
- Restaurants and retailers cite slower starts to the year, attributing it to weather and one-time factors.
Factors Affecting Spending
- The recent consumer spending slowdown coincides with the new administration, but it's too early to attribute it solely to policy changes.
- Uncertainty, tariff concerns, job cut anxieties, and weather impacts likely contribute to the slowdown.