Summary of Euro Area Outlook 2026 Industry Overview - The report focuses on the Euro area economy and its outlook for 2026, highlighting both cyclical improvements and structural challenges. Key Points Economic Growth Forecast - Euro area growth is forecasted at **1.3%** for 2026, with a slight increase to **1.4%** on a Q4/Q4 basis, up from **1.3%** last year, aligning with consensus expectations [3][6][34] Factors Driving Cyclical Improvement 1. **German Fiscal Stimulus**: - Germany's fiscal expansion is expected to provide a significant boost, with the deficit projected to rise to **3.7%** of GDP in 2026, contributing **0.5 percentage points** to growth [9][12] 2. **Diminished Global Trade Tensions**: - The negative impact from global trade tensions is anticipated to lessen, with a previous **0.4%** hit to real GDP from tariffs expected to fade [15][19] 3. **Robust Consumer Spending**: - Real household income growth is projected at **1.5%**, with consumption growth also expected at **1.5%** in 2026, supported by lower energy prices [19][44] Structural Headwinds - Despite cyclical improvements, significant structural challenges remain: - Increased competition from China's renewed export push is expected to negatively impact European trade, particularly affecting Germany (estimated **0.9%** hit to GDP) and Italy (estimated **0.6%**) [23][30] - High energy costs, underinvestment in high-tech sectors, regulatory burdens, and demographic shifts are identified as ongoing domestic challenges [27][30] Labour Market and Inflation - Unemployment rates are expected to remain near historic lows, with wage growth projected to slow to **2.9%** by the end of 2026, aligning with a medium-term inflation target of **2%** [37][41] - Core inflation is expected to dip slightly below **2%** by the end of 2026, influenced by a stronger Euro and lower energy prices [44][50] Monetary Policy Outlook - The European Central Bank (ECB) is expected to maintain current rates in 2026, with potential cuts requiring a clear catalyst, such as a significant economic downturn or a pronounced inflation undershoot [48][51] - A return to rate hikes would depend on demand-driven inflationary pressures or significant shocks leading to deviations from inflation targets [55][56] Country-Specific Focus - **Germany**: Monitoring the quality of public spending and reform agenda is crucial for improving medium-term growth [62] - **France**: Political and fiscal risks remain, with a projected government deficit reduction from **5.4%** to **5.1%** of GDP in 2026 [66] - **Southern Europe**: Continued economic resilience is noted, with structural transformations in Spain, Portugal, and Greece [71] Policy Initiatives - EU policymakers have an opportunity to implement reforms that could enhance economic performance, focusing on reducing vulnerabilities and building a single market [74] Additional Insights - The report emphasizes the importance of monitoring fiscal policies and structural reforms across member states to sustain the cyclical recovery and address long-term challenges [4][61]

Core Insights - Retail sector has seen unexpected consumer spending during the holiday season despite economic concerns, with a projected holiday spend increase of 4 to 5% [5][6] - Consumer sentiment remains low, but spending is driven by employment stability and rising wages, which are outpacing inflation [2][3] - The impact of tariffs on retail prices has been less severe than anticipated, with price increases on tariffed discretionary goods around 3%, significantly lower than initial expectations [6][9] Group 1: Consumer Spending - Consumers are spending more than expected, particularly in the upper half of the income distribution, while the lowest income groups are struggling [4][5] - The holiday spending is projected to yield good gross margins for retailers, indicating strong earnings potential [5][6] Group 2: Economic Environment - GDP is performing well, but consumer sentiment is low, suggesting a disconnect between economic indicators and consumer feelings [2] - Employment conditions are favorable, with job security and wage growth contributing to consumer spending behavior [3] Group 3: Tariff Impact - Initial fears regarding tariffs led to expectations of price increases exceeding 6%, but actual increases were around 3% due to effective supply chain management by retailers [6][8] - The inflation rate is currently around 2.7%, which is manageable compared to previous highs, indicating that tariffs did not significantly contribute to inflation as feared [9][10] Group 4: Retailer Performance - Larger, well-capitalized retailers have largely remained unscathed by economic challenges, while smaller retailers face bankruptcy and market share loss [10][11] - The number of bankruptcies is increasing, but established retailers like Walmart continue to perform well [10][11]

Summary of Key Points from the Conference Call Industry Overview - The report discusses the **US Economics** and highlights the performance of the economy in Q3 2023, particularly focusing on GDP growth and consumer spending trends [6][7]. Core Insights - **GDP Growth**: The real GDP registered a strong annualized growth of **4.3%** in Q3, surpassing the **3.8%** growth in Q2. This growth was supported by a reduction in imports, which contributed significantly to the shrinking trade deficit [6]. - **Consumer Spending**: Consumer spending is expected to play a crucial role in the growth outlook, with a notable increase in services spending, particularly in healthcare, during early Q3. The revised data indicates a stronger advance in consumer spending than previously anticipated [7][8]. - **Job Market Discrepancy**: There is a notable contrast between strong economic activity and softer job market data. Despite robust GDP growth, payroll job growth was only modestly positive, suggesting a potential slowdown in job and income growth, which may lead to reduced consumer spending in the future [8][9]. - **Q4 Projections**: A slowdown in consumer spending is anticipated in Q4, with a projected real GDP growth of just **1%** due to factors such as the government shutdown and overall weaker consumer spending [9]. Additional Important Points - **AI Investment**: AI-related business investments have been contributing positively to growth this year and are expected to continue doing so in the next year [7]. - **Retail Sales**: Retail control group sales were strong in October, although overall goods spending was weak, particularly affected by the automotive sector [9]. - **Long-term Outlook**: For 2026, a real GDP growth of around **2%** is projected, indicating a more moderate growth environment compared to the current year [9]. This summary encapsulates the key insights and projections regarding the US economy, focusing on GDP growth, consumer spending, and the job market dynamics.

Economic Growth - US gross domestic product (GDP) rose by 4.3% in the third quarter, driven by strong consumer spending [1][2] - This growth rate was 0.5 percentage points higher than the previous quarter and a full percentage point above economists' forecasts [2] Consumer Spending - Consumer spending increased at a 3.5% annualized pace in the third quarter, marking a one-point rise from the second quarter and the highest rate since the last quarter of 2024 [4] - The consumer sector accounts for approximately 70% of the US economy, highlighting its critical role in economic performance [4] Inflation and Federal Reserve Policy - Inflation rose to an annualized rate of 2.9% in the third quarter, up from 2.6% in the second quarter, exceeding the Federal Reserve's 2% target [3] - The strong GDP growth may lead the Federal Reserve to maintain steady interest rates while focusing on controlling inflation [3][5] Market Outlook - Analysts suggest that the current economic conditions represent a "Goldilocks scenario" with above-potential growth and declining but elevated inflation [5] - Predictions indicate that the Federal Reserve may adopt a dovish stance, with Bank of America and Goldman Sachs forecasting two rate cuts in the upcoming year [5]

Summary of the 2026 Consumer Outlook Conference Call Industry Overview - The report focuses on the **U.S. consumer spending** outlook for 2026, highlighting the expected growth trends and underlying economic factors. Key Points and Arguments Consumer Spending Growth - Consumer spending grew at a strong **3.5%** pace in Q3 2025 but is projected to moderate to **2.2%** in 2026 on a Q4/Q4 basis, down from **3.4%** in 2024 [2][5][30] - The slowdown is attributed to slower real income growth, with job gains slowing and tariff-related price increases keeping inflation elevated [2][5] - The new tax bill is expected to provide a **+0.2 percentage point (pp)** boost to household consumption growth in 2026, particularly in the first half of the year [10][18][21] Job Growth and Labor Income - Job growth is anticipated to rebound from **32,000** per month to **70,000** in 2026, driven by reduced tariff impacts and fiscal stimulus [11][14] - Real labor income growth is expected to rise to **2.3%** in 2026, up from **1.9%** in 2025, providing a solid foundation for consumption growth [11][22] Inflation and Wage Growth - Inflation is projected to decline more than wage growth, leading to slightly higher real wage growth of just over **1%** [15][16] - The report estimates that tariff effects have boosted inflation by **0.5pp** so far, with an additional **0.3pp** expected over the next six months [15] K-Shaped Recovery - The consumer economy is expected to exhibit a **K-shaped** recovery, with lower-income households facing the most significant challenges due to government spending cuts and reduced immigration impacting job growth [33][35] - Higher-income households are likely to experience stronger spending growth, benefiting from wealth effects driven by rising equity prices [38] Risks to Consumer Spending - Two major risks to the spending outlook include: 1. A potential weak job market that could restrain income and spending growth, particularly affecting lower-income workers [47][48] 2. A significant decline in equity or asset prices, which could turn the wealth effect into a drag on spending, with estimates suggesting a **20%** decline in equity prices could subtract **0.7pp** from consumption growth [51][52] Overall Consumption Forecast - The forecast for consumption growth in 2026 is solid at **2.2%**, exceeding the consensus forecast of **1.9%**, with stronger growth expected in the first half of the year due to fiscal and wealth effects [30][32] Additional Important Insights - The report emphasizes the importance of the new fiscal legislation and its impact on disposable income and consumption growth [18][21] - It highlights the stabilization of delinquency rates in consumer loans, suggesting that rising delinquency rates may not pose a significant risk to spending [41][42] This summary encapsulates the critical insights from the conference call regarding the U.S. consumer spending outlook for 2026, focusing on growth expectations, underlying economic factors, and potential risks.

Joe, always good to see you. Thanks so much for joining me. >> Thank you.Very good to be with you, Jennifer. Happy holidays. >> Happy holidays to you.And what a way to kick off the holidays with such a stellar third quarter GDP number up 4.3% a full percentage point above expectations and driven by consumer spending up three and a half% though a large chunk of that from healthcare spending. Though we also saw trade really add to this number as well. Joe, can we see this level of growth sustained into next y ...

Economic Performance - The US real gross domestic product (GDP) rose at an annualized rate of 4.3% in the third quarter, exceeding the expected 3.3% and surpassing the 3.8% growth in the second quarter [1][8] - The increase in real GDP was driven by consumer spending, exports, and government spending, although it was partially offset by a decrease in investment [1] Consumer Spending - Real personal consumer spending increased by 3.5% in the third quarter, compared to a 2.5% rise in the second quarter [3] - Consumption, particularly from wealthier Americans, was identified as a key driver of economic growth, with AI investment not being a significant factor in the third quarter [2] Trade Balance - Imports fell by 4.7% in the third quarter, a smaller decline compared to a 29.3% drop in the previous quarter [3] - Exports rose by 8.8% in the third quarter, recovering from a 1.8% drop in the second quarter [3] Economic Outlook - The economic report was a positive surprise amid headwinds faced in 2025, including the impact of tariff announcements and a recent government shutdown [4] - The Congressional Budget Office indicated that the government shutdown likely lowered real GDP during its duration, but growth is expected to rebound post-shutdown [4] - The Federal Reserve has noted an improving outlook for growth entering 2026, with solid growth anticipated due to factors like AI and consumer spending [7]

🇺🇸 UPDATE: U.S. GDP grew 4.3% in Q3 2025, beating the previous quarter’s 3.8% as consumer spending, exports and government outlays lifted economic activity despite weaker investment. https://t.co/PqO5lgU2DW ...

Economic Growth - U.S. gross domestic product (GDP) increased at a seasonal and inflation-adjusted annual rate of 4.3% in Q3, marking the highest growth rate in two years, driven by strong consumer spending, exports, and government spending, despite a decrease in investment [2][3] Consumer Spending and Confidence - Consumer spending remains robust, particularly on healthcare and recreational vehicles, but consumer confidence has declined by 3.8 points in December, marking the fifth consecutive drop across various demographics [3][4] - The Conference Board's findings indicate that while consumers are optimistic about spending on big-ticket items like homes and cars in the coming months, overall consumer sentiment is pessimistic due to concerns over prices, inflation, and political factors [4][5] Inflation and Financial Pressure - Although price growth is slowing, consumers continue to face higher prices on essential goods, leading to a disconnect between perceived inflation and actual spending power, which affects spending decisions and brand loyalty [6] - Different age groups experience financial difficulties in varying ways, with older Americans on fixed incomes feeling the pressure from rising costs of essentials, while younger adults face challenges from unstable income and credit card debt [7]

Welcome back to Money Movers. December consumer confidence data crossing the wires last hour showing the fifth straight month of declines and the lowest level since April and Visa out with a new report today signaling a more bullish outlook for the consumer with overall spending coming in 4% higher than last year. Here with us now to discuss is the CEO of Tanganger, Steven Yalof.Thank you very much for being here. Um, >> you know, it's hard to kind of disentangle the two because sentiment feels so dire, but ...