Goldman Sachs The Markets
Is the US consumer still strong?
Sep 27, 2024
In this discussion, Scott Feiler, a Consumer Sector Specialist at Goldman Sachs, teams up with Equities Sales Trader Mike Washington. They dive into the recent dip in consumer confidence, examining factors like election cycles and corporate trends. The pair highlights stark spending differences among various income groups and anticipates shifting habits in middle-income consumers. They also touch on holiday spending predictions and investor interests in consumer sub-sectors, including innovative stocks in housing and apparel.
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Quick takeaways
- Despite a significant drop in consumer confidence, historical patterns suggest stability in consumer behavior, especially during election cycles.
- Shifts in spending among income groups, particularly the middle-income cohort, highlight emerging opportunities in sectors like housing and apparel.
Deep dives
Impact of Consumer Confidence Decline
Recent data reveals a significant drop in U.S. consumer confidence, with the index experiencing its largest one-month decline since 2021. Despite this drop, experts suggest that the current level of confidence is consistent with trends observed over the summer, indicating a degree of stability. Historical patterns show that consumer confidence can fluctuate significantly ahead of election cycles, drawing parallels to declines noted during the same period in 2020. Factors such as job availability, which remains robust with more job openings than seekers, and declining gasoline prices contribute to a more discerning but stable consumer environment.
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