Just when everyone is abandoning the recession call, the data starts to slow down.
1) The Restaurant Performance Index has sharply declined in recent months, see the first chart below.
2) Credit card and auto loan delinquencies continue to rise, and these trends will continue with the Fed on hold well into next year; see the second and third charts.
3) Weekly data for bank lending is slowing rapidly, and weekly credit card data shows that consumer spending on durables that require financing, such as furniture and electronics, is slowing, see the fourth and fifth charts.
The bottom line is that Fed hikes are starting to negatively impact consumer spending, as also shown in the weekly data in the sixth chart.
Weaker consumer spending is not surprising. The whole idea from the Fed raising interest rates is to slow down growth and ultimately inflation.
Source: National Restaurant Association, Haver, Apollo Chief EconomistSource: New York Fed Consumer Credit Panel / Equifax, Apollo Chief EconomistSource: FRBNY Consumer Credit Panel, Equifax, Haver Analytics, Apollo Chief EconomistSource: Federal Reserve Board, Haver Analytics, Apollo Chief Economist.Source: BEA, Haver Analytics, Apollo Chief Economist. Note: The weekly values represent the predicted percentage difference from the typical level of spending (prior to the pandemic declared by the World Health Organization on March 11, 2020) after adjusting for day-of-week, month, and year effects, based on daily data. The typical level corresponds to a value of zero.Source: Redbook, Haver Analytics, Apollo Chief Economist
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