Mastercard's Michelle Meyer on why the job market deserves close attention

Consumer Spending Outlook - The Mastercard Economic Institute forecasts a 3.6% growth in retail sales for the holiday season, which is consistent with spending trends observed over the summer months [1][2] - Last year's holiday spending growth was 4.1%, driven by high volumes and disinflation in many categories, while this year presents more pricing challenges for consumers [3][5] E-commerce vs. In-store Spending - E-commerce retail spending is expected to grow by 7.9%, significantly outpacing the just over 2% growth for in-store shopping, indicating a shift in consumer behavior towards online shopping [6][7] Consumer Demographics and Spending Power - Spending is increasingly driven by high-end consumers, supported by wealth gains in markets and real estate, which have created a positive wealth effect for upper-income households [8][9] - The overall household balance sheets are in good shape, with serious delinquency rates trending slightly lower, suggesting consumers are well-equipped to manage spending this season [12] Labor Market Dynamics - Job creation has slowed, but the labor market remains balanced with low firing rates, contributing to a steady unemployment rate [14] - The impact of technological advancements, particularly AI, on the job market is a topic of debate, with potential structural changes expected rather than cyclical dynamics [15][16]