Goldman Sachs The Markets
What are retail earnings and CPI telling us about the US consumer?
Nov 17, 2023
Discussion on declining retail sales and consumer spending in the US, resilient consumers despite spending less frequently. Performance of retail sectors with challenges in housing and autos, positive in restaurants and smaller ticket experiences. Impact of consumer price index on rate decisions. Predictions for Black Friday, increase in consumer spending in apparel, footwear, and electronics.
06:12
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Quick takeaways
- Big retailers like Walmart and Home Depot are experiencing a slight pullback in discretionary spending, but their earnings remain strong due to clean margins and lower costs.
- Sectors tied to big-ticket items like housing and autos are underperforming, while spending on restaurants and smaller ticket experiences is stronger.
Deep dives
Consumer Spending is Starting to Slow Down
The podcast explores how consumers in the US are starting to pull back on spending. While big retailers like Walmart and Home Depot have acknowledged a slight pullback in discretionary spending, earnings of these companies are still good due to clean margins, lower inventory costs, and favorable labor costs. Sectors tied to big-ticket items like housing and autos are performing less well, while restaurants and smaller ticket experiences are seeing stronger spending.
