Economic Outlook - The forecast suggests an optimistic outlook for next year due to additional GDP growth, easing inflation, and a steady unemployment rate [1] - Outside forecasts also indicate a pickup in growth [2] - Consumer spending has been resilient, contributing to the growth [2][4] - AI spending on data centers and related areas has been supporting business investment [2][4] - Fiscal policy is expected to be supportive [4] Growth Expectations - The baseline expectation for next year is a pickup in growth from the current 1.7% [3] - The SCP median growth is 1.7% for this year and 2.3% for next year [3] - Adjusting for the shutdown, the growth would be 1.9% and 2.1% for 2025 and 2026 respectively [3]

Economic Outlook - The economic outlook for next year appears optimistic due to additional GDP growth, easing inflation, and a steady unemployment rate [1] - The forecast indicates a pickup in growth from the current low level of 1.7% to 2.3% for next year, with adjustments accounting for previous shutdown impacts [3] Drivers of Growth - Key drivers of the positive forecast include resilient consumer spending and sustained business investment in AI-related sectors, particularly data centers [2][4] - Fiscal policy is expected to remain supportive, contributing to solid growth alongside ongoing AI spending [4]

Economic Outlook - Mastercard Economic Institute expects US GDP growth of 22% in 2026, driven by AI and trade realignment [2] - The Institute anticipates moderate inflation in the US, with continued disinflation in the services sector [7][8] - Global GDP is forecasted to grow by 31% [14] Consumer Spending - Black Friday spending increased by 41% year-over-year [4] - The Institute projects mid-3% growth for overall holiday spending [4] - US spending on e-commerce from Chinese mainland initially grew by 20% year-over-year (January-April) but contracted by 6% (May-September), offset by increased European spending on Chinese mainland e-commerce [6] Labor Market & Investment - Despite some slowdown in job creation in 2025, active investment in the digital economy and AI continued [10] - Lower-income tiers are experiencing a slowdown in wage growth compared to higher-income populations [13] Uncertainty & Policy - Policy changes can create uncertainty, causing businesses to pause and wait for clarity [9]

Core Viewpoint - Walmart has shown strong performance in 2023, with shares up 25%, outpacing both Amazon and the S&P 500, driven by two key catalysts: online advertising and e-commerce growth [1]. Group 1: Online Advertising - Walmart's global ad business grew by 53% year over year in Q3 FY26, indicating significant potential for revenue growth and profit margin enhancement [4]. - Online ads, while not a large part of Walmart's business, are growing rapidly and can improve profit margins compared to the low single-digit margins typical in the retail industry [3]. - The contribution of online ads is reflected in Walmart's 34% year-over-year net income growth, despite only a 6% increase in revenue [6]. Group 2: E-commerce Growth - E-commerce sales have shown strong performance, with a 27% year-over-year growth in Q3 FY26, demonstrating Walmart's ability to compete effectively with Amazon [7]. - Walmart's stores function as logistics hubs, allowing for efficient nationwide delivery and reduced shipping costs, which supports e-commerce growth [7]. - The increase in e-commerce sales is also expected to drive higher ad revenue, mirroring trends seen at Amazon [8]. Group 3: Consumer Spending - The company's performance is closely tied to consumer spending, which needs to remain resilient for continued revenue growth [9]. - Despite potential consumer pullbacks, Walmart's focus on low prices positions it well during economic downturns, allowing it to thrive even in challenging economic conditions [10]. - Recent data from Adobe Analytics indicates a 7.7% year-over-year increase in Cyber Monday sales, suggesting continued consumer spending, which could bode well for Walmart in 2026 [11].

Consumer Spending - Consumer spending stalled in September [1] Economic Indicators - Inflation remained stubborn [1] Reporting Delays - Report was delayed due to shutdown [1]

Consumer spending stalled in September as inflation remained stubborn, shutdown-delayed report shows.https://t.co/YUv2lvJLIZ ...

Core Insights - Consumer spending increased in September, indicating a likely strong economic growth in the third quarter [1] Group 1 - The rise in consumer spending is expected to be a precursor to robust economic growth [1]

WASHINGTON, Dec 5 (Reuters) - U.S. consumer spending increased marginally in September, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster ​labor market and rising cost of living curbed demand. Consumer spending, which accounts for more than ‌two-thirds of economic activity, rose 0.3% after a downwardly revised 0.5% gain in August, the Commerce Department's Bureau of Economic Analysis ‌said on Friday. Economists polled by Reuters had forecast consumer spending ad ...

Core Insights - Macy's has raised its sales forecasts for the financial year, expecting full-year sales between $21.5 billion and $21.6 billion, indicating strong consumer spending despite economic concerns [1] - The company reported a sales growth of approximately 3% in the quarter ending Nov. 1, marking its strongest performance in over three years [1] Consumer Behavior - The U.S. retail economy shows that consumers are still willing to spend but are becoming more selective in their purchases [2] - A record $11.8 billion was spent online during Black Friday, reflecting consumer engagement with discounts offered by retailers [2] Strategic Initiatives - Macy's CEO Tony Spring emphasized the importance of price cuts and a compelling product offering as the company enters the holiday season [3] - The increase in sales is attributed to Macy's ability to cater to a diverse consumer base, including both discount shoppers and luxury buyers, with significant sales growth at Bloomingdale's [3] Company Developments - Since joining Macy's in 2024, CEO Spring has focused on investing in high-performing stores by increasing staff and advertising as part of a turnaround strategy [4] - Despite low consumer confidence and predictions of reduced holiday spending, the National Retail Federation reported a rise in shoppers during the Thanksgiving weekend, with 203 million people participating, up from 197 million the previous year [5] Market Trends - Dollar Tree reported a 9.4% sales growth in its latest quarter, benefiting from consumers opting for budget-friendly options [5]

Core Insights - Strong consumer spending is reported during the holiday shopping season, with record sales on Black Friday and expectations for high spending on Cyber Monday [1][4][5] - Economic indicators suggest that consumer incomes have increased under the current administration, contributing to higher spending [2][6] - Despite concerns about inflation and rising costs, consumer confidence appears robust, leading to increased holiday shopping [5][6] Group 1: Holiday Sales Performance - Black Friday generated $11.8 billion in online sales, marking a 9.1% year-over-year increase and setting a new single-day record [4] - Cyber Monday is projected to reach $14.2 billion in online sales, reflecting a 6.3% increase from the previous year [5] - A Deloitte survey indicates that 82% of consumers plan to shop between Thanksgiving and Cyber Monday, up from 79% last year [5] Group 2: Economic Context - Incomes have reportedly increased by $1,500 per person this year, contrasting with a drop of about $3,000 per person under the previous administration [2] - Inflation rates have decreased to approximately 2.5%, significantly lower than wage growth, which supports increased consumer spending [6] - Retailers anticipate that both online and in-store sales will reach record highs this holiday season [6]