Summary
- Consumer Sentiment fell 16.3% YOY in December, with all components of the index down YOY; MTM the index rose slightly, a positive shift for retailers looking to drive December sales
- Consumers have less spending power and are dipping into savings / extending credit to cover the gap; personal savings was down 2.3% in October, and revolving credit debt continues to climb, increasing 15.2% in October
- Retail sales (excl. autos/parts/gas stations) increased 6.7%% in November, slightly exceeding the Core Inflation rate of 6%; sales were down .2% over previous month totals
- Sales growth is still not keeping up with Inflation, which is driving increased inventory levels
- Despite this consumers have returned to dinning out, while they continue to buy online at the same rate.
- Labor challenges continue as unemployment remains low, but job openings remain high, especially in accommodations and restaurants
- Q3 GDP increase was revised upward to 2.9 percent; the increase over Q2 was attributed to increases in exports and consumer spending that were partly offset by a decrease in housing investment
- The Consumer Price Index increased 7.1% in November and Core
CPI increased 6.0%; transportation, fuel, and food at home
(groceries) continue to drive the overall index, although the rate
of increase has slowed across the board
- Retail gas prices continue to drop; the average U.S. price as of 12/12 (all Grades) was $3.35
- Supply chain costs continue to ease; general freight trucking is 5.3% below the 2-year high in March 2022; container freight rates continue to decline
- Retailers continue to focus on deep promotions and markdowns to move excess inventory into the final days of the holidays, as well as broad clearance sales after; combined discounts and rising costs will exude pressure on Q4 earnings
Key Consumer Metrics
Consumer Sentiment Index
Consumer Sentiment fell 16.3% YOY in December, with all components of the index down YOY; on a month-to-month basis the index did rise slightly, a positive shift for retailers looking to drive December sales
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