The almighty (and confusing) US consumer.
US economic health is intricately tied to consumer behaviour with personal consumption accounting for ~70% of GDP. Predicting whether or not Americans will keep opening their wallets for a new car, a night at a restaurant or a nice vacation has far reaching implications. The two most important surveys which attempt to do this are pointing to extremely different futures and the gap between them is near all-time highs.
If you look at the University of Michigan survey, you might expect a recession soon – indeed, it is at its lowest point in 10 years. On the other hand, if you look at the Conference Board survey, the future looks relatively rosy (although not as good as prior to the March 2020 crisis).
For the moment, it looks as though the Conference Board measure better reflects retail spending, which continues to be high. Any pull-back in that measure might start to make us think twice about the health of the US consumer and the future of economic growth.
Inflation out of control? You might expect to see an inflation chart like this in an emerging market, but this is happening in the 5th largest economy in the world.
Pricing power is back! Inflation remains top of mind for investors but has filtered through to Main Street. This chart from Macrobond Financial shows that more companies are planning to raise prices than at any time in the last twenty years.