Highlights – What You Need To Know

U.S. CONSUMERS: Consumer confidence dropped again in November

  • Consumer sentiment for the 4th straight month, falling 5% in November
    • Long-run economic outlook slid 12%, in part due to growing concerns about the negative effects of high interest rates
  • Personal disposable income* rose 7.9% in September 2023; consumer expenditures increased 6.8% and were .7% above the previous month
  • Total Consumer Debt
    • Total household debt increases again Q3-2023 to $17.3 trillion
    • Credit card balances remain high and consumer debt continues to grow – consumers ability to make minimum payments and pay off balances is still a concern
    • Revolving credit debt up nearly 11% vs. 2022
  • Loan Delinquencies
    • The delinquency rates for consumer loans has been rising since 2021 and is now at its highest level since 2019, due to a combination of factors, including rising inflation, interest rates, and rising debt load carried by consumers

RETAIL SALES

  • September retail sales were down 0.1% from September 2023, and up 3.5% above last year
    • Key hard goods segments continue to show YOY declines, with strong increases in Food Services and Dining (8.6%), Non-Store retail (7.6%), and Health and Personal Care (9.6%); consumers continue to hold off purchases on durable goods
  • U.S. Vehicle Sales
    • New vehicle sales increased 5.4% YOY, with CPI 2% above LY
    • Used vehicles sales (through September) increased 2.7% vs. last year, CPI for used vehicles down 6.6%
  • Air travel continues to thrive
    • Air travel increased again among U.S. travelers; year-to-date, TSA checkpoint numbers are up 12.7%; the price of air travel was down .9%t MTM, and 13.2% lower than last year - air travel for holidays should match or exceed pre-COVID levels
    • Air travel has fully recovered (and now ahead of) pre-COVID activity

Highlights – What You Need To Know

BROAD ECONOMIC INDICATORS: Inflation is slowing but interest rates remain a challenge

  • Interest rates: Bank Prime Loan Rate (8.5%) and Federal Funds Rate (5.33%) were unchanged from previous month
  • Gross Domestic Product: Q3 GDP increased 4.9%, exceeding analysts' expectations and well above the 2.1% increase in Q1 – the strong Q3 increase was driven in large part by consumer spending
  • The Consumer Price Index October Consumer Price Index for rose 3.2%, with Core CPI up 4.0%
    • Motor fuel index was down 5.6%
    • Housing increased 5.2% and Food Away From Home rose 5.4%

U.S. EMPLOYMENT: Unemployment remains low

  • Unemployment remains below 4%; non-farm employment was up 2.1% month-to-month, with employment rising by 150,000 (1.9%)

HOUSING: Mortgage rates have trended down with inflationary pressures receding; improving economy, improving inflation and lower mortgage rates could bring more homebuyers into the market

  • New home sales increased 34% in August, driven largely by shortages of pre-owned inventory; new housing starts were down 7.2% YOY
  • The median U.S. home price in September declined 12.3%; MTM the median price was down 3.3%

SUPPLY CHAIN: Freight costs remain stable

  • In September, general freight trucking was down 6.2% over last year and increased 2.2% from the previous month
  • Deep sea freight rates are down 21.3% YOY and 11.4% lower MTM

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