Just How Robust is the Mighty US Consumer? - ANZ
Research Team at ANZ, suggests that when world growth splutters,
producers have traditionally looked to the US consumer to save the day.
Key Quotes
“They were sorely missed in the years following the Global Financial
Crisis, but are supposedly set to dominate the stage once more, given
the appealing combo of low interest rates and an unambiguously stronger
US labour market, not to mention the crucial fact that US households
have made more painful progress repairing their balance sheets than
consumers in most other countries. But evidence is accumulating that
they may not be feeling ready to spend.
Overnight Disney and Macy’s (-13.8%) led retail stocks down on
disappointing earnings, dragging down the equities of other large
retailers Walmart, Target, and Kohls. Conference board consumer
confidence slipped in April (more than expected) and has been flat to
falling since early 2015 (off reasonable levels admittedly) despite what
has been a solid run of private payrolls growth.
Was the April payrolls miss (+160k vs +200k expected) a shot across the
bow? It was notable that retail employment fell. Meanwhile the odds on
the Fed raising rates in June have dropped to 4% (from as high as 23%
last month), suggesting that if this meeting is truly ‘live’ as claimed
by Atlanta Fed President Bullard last week, it is barely breathing.”
