Charts to Chew On: A Faltering February.

Contextualizing monthly consumer sentiment and market momentum. Data as of February 28, 2023.

For those who are newer here, I publish monthly read outs on the state of the markets and the corresponding implications for consumers. Read on for more!

Post a jubilant January, February unwound under the pressures of heightened uncertainty as the market struggled to stand up to the threat of more persistent than initially anticipated inflation. With last week’s inflation report surprising to the upside and marking a third consecutive month of rising inflation, the calls for a reprieve in rate hikes seem to be waning by the day. Further validation out of the University of Chicago’s Booth School of Business seemed to point to what we all perhaps knew but refused to believe — “We find no instance in which a significant central bank-induced disinflation occurred without a recession.” Uh oh…

So what does this mean for the US consumer? As borrowing rates and consumer debt levels continue to alarmingly rise in tandem, it appears that not even record low unemployment rates are quelling consumers’ financial fears. Yet, despite their reported angst, we have yet to see a pullback in spending with last month showing the largest uptick in consumer spending in close to two years. Surely something must give?

As we await the inevitable — be it the recession we’ve all been bracing for or a Fed-led trick landing — I hope you find some semblance of sense in the data dump below.

Note: Data reflective of February 28, 2023. This does not constitute investment advice.

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