Consumer Spending May Surprise You
August 28, 2024
Consumer spending accounts for the majority of the U.S. economy’s activity, which is why evidence of a cooling job market has many wondering if the consumer might be next to falter. Recently the Bureau of Labor Statistics reported that the U.S. has employed significantly fewer people than the market expected in the 12 months ending in March. This indicates not only that the labor market has cooled, but also that it began to weaken earlier than many thought.
So is the slowing job market pointing to a consumer spending-led recession? We don’t think so. In addition to broad-based indicators such as retail sales and consumer confidence, consumers are still opening their wallets for services. Airline travel is only slightly lower over the past two months and still remains at the upper end of its range since 2023. Similarly, people are eating out more now than they did 12 months ago and the level of growth is near the highest since 2023.
With inflation heading in the right direction and the first rate cut immenent, the Federal Reserve’s focus will turn to the growth outlook in order to achieve a soft landing. The central bank will be watching for any signs of unexpected weakening in the labor market that could ultimately trickle down to the consumer. For now, overall consumer spending remains positive and supports our outlook for a soft landing.
This material is provided for illustrative/educational purposes only. This material is not intended to is not intended to constitute legal, tax, investment or financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation.
The Bank of New York Mellon, DIFC Branch (the “Authorized Firm”) is communicating these materials on behalf of The Bank of New York Mellon. The Bank of New York Mellon is a wholly owned subsidiary of The Bank of New York Mellon Corporation. This material is intended for Professional Clients only and no other person should act upon it. The Authorized Firm is regulated by the Dubai Financial Services Authority and is located at Dubai International Financial Centre, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE.
The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the Federal Reserve and authorized by the Prudential Regulation Authority. The Bank of New York Mellon London Branch is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The Bank of New York Mellon is incorporated with limited liability in the State of New York, USA. Head Office: 240 Greenwich Street, New York, NY, 10286, USA.
In the U.K. a number of the services associated with BNY Wealth’s Family Office Services– International are provided through The Bank of New York Mellon, London Branch, One Canada Square, London, E14 5AL. The London Branch is registered in England and Wales with FC No. 005522 and BR000818.
Investment management services are offered through BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, One Canada Square, London E14 5AL, which is registered in England No. 1118580 and is authorized and regulated by the Financial Conduct Authority. Offshore trust and administration services are through BNY Trust Company (Cayman) Ltd.
This document is issued in the U.K. by The Bank of New York Mellon. In the United States the information provided within this document is for use by professional investors.
This material is a financial promotion in the UK and EMEA. This material, and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such.
BNY Mellon Fund Services (Ireland) Limited is regulated by the Central Bank of Ireland BNY Mellon Investment Servicing (International) Limited is regulated by the Central Bank of Ireland.
Trademarks and logos belong to their respective owners.
BNY Wealth conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. BNY and Bank of New York Mellon are corporate names of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally.
Past performance is no guarantee of future results.
©2024 The Bank of New York Mellon. All rights reserved.
WI-597882-2024-08-27
