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The latest consumer indicators from September show a stable unemployment rate, income outpacing debt, and inflation potentially cooling. Strong sales data suggests that many households still have excess savings and – after two years of declining – real disposable income is rising. The shift in wealth distribution to adults over 70 represents a demographic less impacted by student loans, mortgage rates, etc. Data would suggest this group is particularly resilient and not afraid to spend on sectors such as dining out and personal care.
On the flip side, warning signals remain. Credit card debt reached an all-time high, and an end to government stimulus payments and deferred student loan payments could put pressure on savings. Loan delinquencies are also on the rise, and rates for the 10-year Treasury Note appear poised to hit 5.0%. The upcoming holiday season will be interesting – recession fears still lurk and the question remains around whether mounting headwinds will finally reach a tipping point.
Surprisingly robust retail sales
Consumer sentiment on the rise
Income and debt growth holds steady
On a monthly basis, AlixPartners charts sales, sentiment and supply chains in consumer-facing businesses. Learn more about the Consumer Products Corner newsletter and read previous articles, here.
