Summary

  • Unemployment remains below 4% at 3.7%; non-farm employment was up 2.7% month-to-month, with employment rising by 339,000 in May
  • Consumer debt reached a new high in Q1 – passing $17 trillion for the first time ever – and consumers continue to take on more revolving credit; revolving credit debt rose 12.7% over 2022 and total consumer credit increased 6.4%
  • Consumer sentiment increased 8% in June, hitting the highest level in four months; the rise is attributable to easing inflation and resolution of the debt crisis – while still at historically low levels, sentiment is 28% above the historic low of June 2022
  • Retail sales increased 3.9% over 2022 – MTM sales increased 0.4%; economists generally were expecting flat to slightly decreasing sales vs. April
    • Food services and drinking places increased 8% YOY
    • Other than non-discretionary categories and e-commerce, most key retail segments experienced YOY sales declines again in May
  • The Consumer Price Index increased 4.0% YOY, with Core CPI up 5.3% - retail gas prices continue to decline, down 18% YOY to $3.64 / gallon nationally through mid-May vs. $4.43 last year
    • The index for shelter was again a large contributor to the monthly all items increase, as was price inflation for food at and away from home
  • Air travel continues to increase among U.S. travelers; year-to-date, TSA checkpoint numbers are up 14%
    • The cost of air travel declined 3% MTM, and was nearly 13.4% lower than last year
  • Bank Prime Loan Rate rose to 8.23%; Federal Funds Rate increased to 5.06% through May
  • 30-year FRM rate of 6.79%, above last year's rate of 5.09%; 15-year rate now above 6%
  • New home sales increased nearly 12% over last year – boosted in large part by low inventory of available homes, but housing starts decreased 22.3%
  • Global Supply Chain Index (GSCPI) decreased in May, falling to -1.71 from -1.35; there were significant downward contributions from Great Britain backlogs and Taiwan delivery times, Euro Area delivery times and backlogs exhibited the largest sources of upward pressure in May
    • General freight trucking cost is down 13.7% over last year and 1.4% lower than previous month
  • Back-to-School could be impacted just as the shopping season gets started if UPS does not reach an agreement by end of July to avert a potential strike as union contract discussions are currently stifled
  • Inventories for April increased 7.6% above 2022; companies will continue face challenges going forward as retail sales remain muted for many segments in May
  • In the current economic environment, retailers must focus on a multi-prong operational improvement approach to drive inventory effectiveness, labor optimization, and operating efficiencies while driving traffic and conversion– crucial for companies to focus on capturing value from changing consumer dynamics to ensure success in the evolving and tenuous retail landscape

Key Consumer Metrics

Consumer Sentiment Index

Sentiment increased 8% in June, hitting the highest level in four months; the rise is attributable to easing inflation and resolution of the debt crisis – while still at historically low levels, sentiment is 28% above the historic low of June 2022

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Consumer Income and Spending

Personal disposable income rose 7.9% in April 2023; consumer expenditures increased 6.7% YOY and was up slightly compared to previous month

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