No Landing Continues, Consumer Spending Very Strong in January

Apollo Chief Economist

The retail sales data for January was strong and shows that the US consumer is not slowing down, see charts below. This is not surprising with a strong labor market, strong wage growth, and high savings across all income groups.

Incoming data for airlines, hotels, restaurants, movie theatre visits, and Broadway shows continue to be strong, and consumer services are not slowing down. And with retail sales mainly measuring goods consumption, the bottom line is that even consumer spending on goods continues to do well.

The no landing scenario continues, and the risks are significant that inflation will stay sticky around 5%, well above the Fed’s 2% inflation target.

Source: Census Bureau, Haver Analytics, Apollo Chief Economist
Source: Census Bureau, Haver Analytics, Apollo Chief Economist

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