Discussing Consumer Spending and How It Gauges Economic Health
April 20, 2023
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Cody Moore, and I am a Partner and Wealth Advisor at Wealth E&P.
With all of the news cycle noise and predictions for where we're headed and what this means in the stock market day-to-day, we wanted to cut through that a little bit and take a look at one of the fundamental indicators that we are monitoring closely at Wealth E&P. Consumer spending is a large component of gross domestic product (GDP) and a good gauge on the health of the U.S. economy. So, what is consumer spending?
Consumer spending is the spending on goods and services of individual consumers in the United States. Let’s take a look here at retail sales over the last few years, essentially coming out of the COVID-19 pandemic, below.
As we can see above, all of that stimulus that was pumped into the economy during the pandemic helped to increase retail sales. Lately, it has begun to stagnate or flatline just a little bit; March was down a little over 1% from February 2023. Overall, it is still increasing if you look at the big picture.
If we take a look above at the City National Rochdale speedometers and hone in on the consumer spending speedometer, we can see a pattern. Over the last few months, consumer spending has begun to decline and is sitting right in the middle of neutral, so it’s really in the middle of the road.
This is just something to take a look at and be aware of. We’re continuing to monitor it and, of course, make adjustments within your portfolios here at Wealth E&P. If you've got any questions for our team, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute! We hope you all have a great week.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.