Higher-income crowd trading down is a warning sign: Strategist

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David Rosenberg News

Consumer Behavior,Federal Reserve

Target (TGT) released its first quarter report, revealing a drop in comparable sales year over year, adding to growing signs that cracks in consumers...

Is this a signal that the economy is beginning to slow? Founder and president of Rosenberg Research David Rosenberg joins Morning Brief to discuss the recent shift in consumer behavior and how the economy's movements may affect the Federal Reserve's future policy decisions.

Well, I think that uh the economy was strong uh in the past tense and of course, we had 3% real GDP growth last year.Uh the last leg of the excess savings uh draw down uh all that pandemic era savings from the stimulus checks got spent.Uh it coincided with a 35% expansion in the fiscal deficit.Um It's uh the data aren't supporting that we're in a recession dot dot dot Just yet.

Well, you know, very interesting comment because uh you know, the Atlanta Fed that does us a great service. Uh and uh, that's manifest itself, I think, and something that we saw in last week's retail sales report, which is that the grocery chains are actually seeing more activity.Uh, being such a massive food retailer at the expense of what, because we still have to eat at the expense of restaurants.

Well, actually, you know, everybody was saying, um you know, after, especially after the um the onset of the conflict in the Middle East, uh and then when with Iran sending these missiles into uh uh into Israel uh last month, uh that oil, oil was supposed to be going over $100 a barrel.

Uh 100% of that deviation from the disinflation trend in 2023 100% of it has come from insurance, health insurance, auto insurance, home, and tenant insurance.

 

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