This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:
The US economic story of the year was hammered home again on Tuesday with the July retail sales report showing consumer spending remains surprisingly resilient.
But it's important to remember that retail sales reports aren't the perfect consumer barometer, as they generally underweight the biggest share of where consumer spending goes: towards services rather than goods.
Many readers will have seen this trends discussed as a consumer preference for "experiences" rather than "things." During the pandemic, the predominance of services spending was challenged, with travel and dining curtailed to prevent the spread of COVID while the housing market went gangbusters.
And commentary from executives at Home Depot (HD) on Tuesday suggest we may not be looking at swift — or eventual — return to these pre-pandemic habits.
As Yahoo Finance's Brooke Di Palma reported, Home Depot CEO Ted Decker told analysts the company doesn't know, "how quickly or further the share shift [from goods to services] in PCE will occur and where spending in home improvement, in particular, will ultimately settle."
As of June, services spending was just under 67% of the overall Personal Consumption Expenditures index, which feeds into GDP. In January 2020, 69% of PCE spending went towards services. This 2 percentage point shift in PCE towards goods and away from services put annualized goods spending $1.6 trillion higher in June 2023 than in June 2019.
And Home Depot CFO Richard McPhail added, "we don't see anything in our business today that tells us that that's the trajectory." In other words, the gap opened between pre-pandemic spending habits and the world consumers live in today may never fully close.
Only the restaurants and bars category of the retail sales report is really an "experience" rather than a "good."
And here we do see some reversion in process. Sales at food services & drinking places rose 1.4% over the prior month in July and 11.9% over the prior year, the biggest annual jump of any retail sales category.
But the return of a consumer habit — eating away from home — may not quite indicate that already-reshaped household budgets are going to again be reoriented in our post-pandemic world.
"The home is so much more important from a financial perspective for, you'd say, all homeowners than it was 3 years ago," McPhail added Tuesday, "that perhaps there's an elevated level of home improvement spend in PCE versus prior years."
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
"come" - Google News
August 16, 2023 at 05:00PM
https://ift.tt/iFkHcxR
The pre-pandemic economy may never come back: Morning Brief - Yahoo Finance
"come" - Google News
https://ift.tt/OxvNwgP
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "The pre-pandemic economy may never come back: Morning Brief - Yahoo Finance"
Post a Comment