Recent data shows a concerning shift in consumer behavior, with restaurant activity—typically a reliable indicator of retail trends—now signaling mounting pressure on household consumption. As the job market weakens, U.S. households appear to be facing increased financial strain, putting their spending power in jeopardy.
Adding to this, spending at discount retailers has outpaced total retail sales (excluding restaurants) since mid-2022, a clear sign that consumers are tightening their belts. This trend reflects broader economic challenges and suggests that American households are feeling the squeeze from rising costs and dwindling disposable income.
"Restaurant activity has generally correlated with, and even slightly led, trends in retail sales. At a time when the job market is weakening, US household consumption seems to be under increasing pressure."
LFDE via @MacrobondF pic.twitter.com/r9KwleRdAn
— Daily Chartbook (@dailychartbook) September 23, 2024
"Spending at discount retailers has outpaced total retail ex-restaurant spending since mid-2022."
– BofA Hutchinson pic.twitter.com/2TqWPAbG3G
— Daily Chartbook (@dailychartbook) September 23, 2024