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.
“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.”