Core Viewpoint - Despite high tariffs, persistent inflation, and challenges in job searching, consumer spending in the U.S. has increased in August, contributing positively to the economy [1] Group 1 - Consumer spending has shown resilience, indicating that Americans are continuing to spend despite economic pressures [1] - The increase in spending is crucial for maintaining economic momentum in the U.S. [1]

US personal spending rose in August by more than forecast as underlying inflationary pressures held steady, illustrating a resilient consumer. https://t.co/oiosTBqndm ...

Group 1 - The final Q2 GDP showed one of the largest upward revisions in recent years, indicating the strongest growth in nearly two years, primarily driven by consumer spending [1][3] - The contraction in the first quarter was attributed to higher imports as companies stockpiled goods ahead of new tariffs, but the positive Q2 results were not solely due to a decline in imports [2][3] - Personal consumption expenditure rose by 2.5% in Q2, significantly higher than the second estimate of 1.6%, suggesting that concerns about a downturn in the USA may be premature [3] Group 2 - Initial jobless claims on 25 September were significantly lower than consensus, indicating a potentially stronger job market than previously perceived [4] - The likelihood of a Fed rate cut on 29 October remains high at around 85%, but the probability of cuts at future meetings has decreased by over 20% compared to the previous week [5] - The euro-dollar has declined recently as sentiment on the dollar improved, supported by the upward revision to GDP and lower initial jobless claims [7]

ToplineThe U.S. economy grew at a rate much higher than originally reported in the second quarter as consumer spending rose, according to revised data released Thursday by the Commerce Department, bringing surprise to economists. One economist noted a revision to economic growth—nearly 1% above initial reports—was “outside the norm.”Getty ImagesKey FactsReal gross domestic product increased at an annual rate of 3.8% in the second quarter, up from an earlier revision of 3.3% and initial reports of 3% growth, ...

Core Insights - Retailers and brands are planning to increase prices to mitigate the impact of tariffs, but this strategy is complicated by economic challenges and the approaching holiday season [1] - Executives from major off-price companies are closely monitoring mainstream retailers' pricing strategies to maintain their value advantage while raising prices [2] - Consumer confidence is declining due to tariff-related price increases and a weakening labor market, leading to slower growth in personal consumption expenditures [2][3] Consumer Spending Trends - US consumer spending growth is expected to remain weak through 2025, with a potential uneven recovery starting in late 2026 across different income groups and spending categories [3] - Wealthier households are increasing their spending on luxury goods, while lower-income households are focusing on essential items, highlighting a growing divide in consumer behavior [3] Price Increases in Luxury Goods - Prices for luxury goods are rising significantly, with high-end luxury handbags increasing by 9%, mid-tier luxury handbags by 14%, women's sneakers by 12%, women's boots by 9%, and women's denim jackets by 34% over the past year [4]

Amazon.com, Inc. (NASDAQ: AMZN ) has contrasting forces at play that may be holding back shares from stronger growth. With growing concerns for consumer spending as the U.S. economy weakens, growth across its consumer-facing businesses may be at risk. On the other hand, Amazon has aMonte Independent Investment Research: Michael Del Monte is a buy-side equity analyst with over 5 years of industry experience. Prior to working in the investment management industry, Michael spent over a decade in professional s ...

Group 1 - The stock market is reaching new heights, but this does not correlate with a rally in the macroeconomy, indicating a potential disconnect between market performance and economic fundamentals [1] - Consumer-facing businesses are showing warning signs regarding consumer confidence and spending, suggesting challenges in the retail sector [1] Group 2 - The article highlights the author's extensive experience in covering technology companies and working with startups, which provides insights into current industry trends [1]

Core Insights - Consumer spending showed positive growth in August, driven by back-to-school shopping and potential tariff effects [1][4] - Total retail sales increased by 0.5% month-over-month and 6.8% year-over-year, indicating strong annual performance despite a slight decline from the previous month [2][3] - Core retail sales, excluding restaurants, rose by 0.3%, slightly lower than overall retail sales growth [2] Retail Performance - The retail monitor indicates considerable volatility in consumer spending, with fluctuations influenced by tariffs and inflation [3][6] - Eight out of twelve retail sectors experienced growth, particularly digital products which increased by 1.6% [4][5] - Discretionary spending showed mixed results, with food and beverage up by 1% and general merchandise up by 0.4%, while sporting goods and garden supplies saw declines of 0.8% and 2.1% respectively [5] Inflation and Tariff Impact - Some gains in retail sales may reflect inflation in imported goods, with consumers potentially buying ahead of tariff increases [4][6] - Adjusted for inflation, consumer spending has been weak over the past three months, suggesting a possible tariff impact [6] Digital Sales Trends - Online sales, particularly in software and digital products, have been consistently strong, contributing positively to overall retail performance [7][8] - The digital category has shown robust growth, with regular increases between 0.5% and 1.5% [8]

Economic Outlook & Consumer Behavior - Companies are struggling to pass price increases to consumers, especially those selling to lower-income demographics [2] - Consumers have absorbed price increases for the past five years since COVID, but are now resistant due to diminished cash reserves [3][4] - Lower-income consumers are depleting their cash balances and increasing debt, excluding mortgage debt [8][9][10] - There's concern that economic weakness among lower-income consumers could spread to other segments [11] Monetary Policy & Market Dynamics - The market is currently in a "bad news is good news" situation, but there's a risk of "bad news is bad news" scenario [6] - Risk-on assets (equities, credit spreads) and risk-off assets (gold, government bonds) are both performing well [6] - The employment side is much weaker than expected, while the latest inflation print is much better than expected [5] - A potential 50 basis point cut by the Federal Reserve should be considered, given the data [12] Productivity & Future Growth - Deregulation is needed to improve supply-side response [13] - Optimism exists regarding productivity gains in the coming years due to AI, life sciences, and robotics [13]

Part of what we also saw was that particularly with middle and lower income consumers, they're feeling under a lot of pressure right now. I think there's a lot of, you know, commentary about what's the state of the economy, how's it doing, and and what we see is it's really kind of a two-tier economy. If you're upper income, earning over $100,000, things are good.Stock markets are near all-time highs. You're feeling uh, you know, quite confident about things. you're seeing international travel, all those ba ...