Economic Activity & Consumer Spending - Economic activity showed little change, with some districts experiencing modest decline [1] - Consumer spending declined, though high-end retail remained resilient [1] - Auto dealers saw declines in EV sales, possibly due to the expiration of tax incentives [1][2] Manufacturing & Trade - Manufacturing increased somewhat, but tariffs and tariff uncertainty acted as headwinds [2] - Input cost pressures were widespread in manufacturing and retail, largely due to tariffs [6] - Companies faced margin compression and financial strains from tariffs, with mixed plans to raise prices [7] Labor Market & Employment - Employment declined slightly, with half of districts reporting weaker labor demand [3] - Hiring freezes and attrition were used to limit employment rather than layoffs [4] - AI replaced entry-level positions or increased worker productivity, curbing new hiring [5] - Employers found it easier to find workers in some sectors, but construction remained tough [5] - Wages grew at a modest pace, but rising health insurance premiums put upward pressure on labor costs [5] Inflation & Prices - Prices rose modestly during the period [6] - Pass-through of higher input costs varied across companies [7] Social Impact - Community organizations saw increased demand for food assistance, partly due to SNAP disruptions [3] Real Estate - Ongoing recovery was noted in the office real estate market [2]

Economic Activity - Overall economic activity remained largely stable, with some districts reporting slight softening [1] - Consumer spending continued to decline despite resilient high-end retail [1] Employment & Wages - Employment edged down [1] - Some contacts noted reduced hiring needs in certain roles due to AI [1] - Wages rose modestly [1] Prices & Costs - Prices increased slightly [1] - Manufacturers and retailers broadly faced tariff-related cost pressures [1]

Market Catalysts & Economic Outlook - The market anticipates a potential rate cut next month, but tax and regulatory changes are another significant macro driver that should not be overlooked [1][2] - The economy appears to be in a soft patch, but upcoming tax cuts for both consumers and businesses are expected to provide stimulus [3] - The expectation is that the Fed will cut rates in December, further boosting the economy [3] - The primary concern is avoiding a recession, as current stock prices do not fully reflect the possibility of one [6][7] Consumer Spending & Market Impact - Tax cuts could lead to increased consumer spending, which is a major driver of the US economy [4] - Companies like Amazon may benefit from increased consumer spending, and the housing market could also see positive effects [5] Market Breadth & Growth - There is hope for a broader market rally, as the market had become narrowly focused on big tech names [8] - Small caps are starting to pick up, and a spreading out of earnings growth beyond tech names could revitalize them [8][9]

After a volatile retail earnings week, the group now heads into its next big test. Whether demand holds up beyond Black Friday. Courtney Reagan joins us now with much more on what to expect.Hey Court. >> Hi Frank. So the next five days are the most important stretch of the year for retail.Adobe says 17% of total online holiday spending will happen during Cyber Week, but physical stores remain a big part of the equation, too. The National Retail Federation predicts 186.9% million Americans will shop in some ...

Holiday Spending Forecast - National Retail Federation (NRF) forecasts a 4% gain in retail sales for November and December, exceeding $1 trillion for the first time [1] - The forecast of 37% to 42% growth translates to $1 trillion in sales [8][11] - Consumer spending on gifts, food, decorations, and other seasonal goods is expected to be $890, slightly down from $902 last year [7] Consumer Behavior & Confidence - Consumers demonstrate engagement in commerce despite low economic confidence [3][4] - Consumers are prioritizing holiday spending by seeking value, convenience, reducing savings, and taking on more debt [5] - Consumers tend to spend more during big shopping weekends than initially indicated in surveys [10] Economic Factors & Retailer Sentiment - Goods inflation is almost flat, and food inflation is around 1%, with some category exceptions [6] - Retailers have generally reported positive earnings despite economic uncertainty, tariffs, and government shutdown [14] - Consumers and retailers are showing resilience in the face of adversity, uncertainty, and volatility [14][15] - Wages are slightly ahead of inflation, contributing to real spending and purchasing power [15]

Core Insights - Inflation is significantly impacting US incomes, comparable to the 2008 Great Recession, which may reduce consumer spending power ahead of the holiday shopping season [1] - The median income growth for individuals aged 25 to 54 is only 1.6% when adjusted for inflation, indicating weak income growth [1][10] - The unemployment rate increased to 4.4% in September, the highest since October 2021, affecting income gains for young workers [6][13] Income and Spending Trends - Households are ending the year with stagnant income growth and flat bank balances after adjusting for inflation [2] - Approximately half of workers aged 50 to 54 have experienced an earnings loss when accounting for inflation [8] - Consumers are facing a holiday season with limited budgets due to low income growth, despite strong stock market gains that are unevenly distributed [11] Inflation and Economic Indicators - US inflation rose by 3% year-on-year in September, the fastest rate since January, while wholesale inflation increased by only 0.3% [12][14] - Retail sales saw a nominal increase of 0.2% in September, but actual spending fell by 0.1% due to a 0.3% rise in prices [12] - Consumer confidence dropped to 88.7 in November, the lowest since April, with a significant decline in perceptions of business conditions and job availability [14]

Economic Outlook - The report suggests a potential slowdown in third-quarter growth due to a miss on the retail side, leading to lower consumer spending expectations for the fourth quarter [2] - The market anticipates the Fed to cut rates due to concerns about economic weakness, outweighing inflation concerns [3] - Consumer confidence data indicates increasing concern about the job market, with more people reporting difficulty finding jobs [5][6] - A survey indicates that 57% of respondents anticipate a weaker economy in 2026, potentially impacting holiday spending [7] - Consumers are expected to reduce spending and prioritize needs over wants during the holiday season, potentially leading to a softer season compared to the previous year [8][9] Federal Reserve (The Fed) - The market speculates that the White House may be considering Kevin Hasset as a potential Fed chair, which could influence interest rate policy [10][11][12][13][14] - The president may prefer a Fed chair who is more inclined to lower interest rates [14] - The bond market's reaction to the potential Fed chair appointment is muted, while the dollar's reaction suggests anticipation of a more dovish Fed [14][15]

what's going on here. What are some of the inputs and how striking was this data to you. >> Yeah, I think I have a a little bit of a less optimistic view of the consumer than Michelle was talking about earlier.So, yeah, broad-based decline in consumer confidence in November uh across jobs, incomes and uh financial situation expectations and uh that is probably due to a government shutdown. remember we were still uh you know in a shutdown uh kind of mode uh during most of November and uh I think we will see ...

Core Insights - The third-quarter earnings season for 2025 indicates a more cautious consumer spending environment, although it may oversimplify the overall trends [1] Group 1: Consumer Spending Trends - Consumer spending is not uniformly down, suggesting a nuanced understanding of the trends is necessary [1] Group 2: Analyst Background - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to insights on current industry themes [1]

Core Insights - The third-quarter earnings season for 2025 indicates a more cautious consumer spending environment, although it may oversimplify the overall trends [1] Group 1: Consumer Spending Trends - Consumer spending is not uniformly down, suggesting a complex landscape rather than a straightforward decline [1] Group 2: Analyst Background - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to insights on current industry themes [1]