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Economic & Equity Update

Robert V DiClemente, Managing Director US Developing Markets Economics

Portfolio Economics: Expect Holiday Chain Store Sales +0-1% Y/Y; Pent Up Demand Fights Renewed Energy Cost Surge, Past Cycle Baggage

October 29, 2009

  • Consumer spending on discretionary items fell much more than employment or income in the holiday 2008 period and much of 2009. The run-rate of October chain store sales would imply a slight gain in coming holiday sales already.
  • Good pent up demand is running into another energy hit with employment still declining. We expect holiday chain store sales to rise 0-1% in Nov.-Jan., above forecasts earlier this year, but decelerating from recent indications.
  • The fresh rally in oil implies a 1.1 percentage point drag on consumer incomes in the year through January 2010 when consumers can ill afford it.
  • For more, please read the full report below.

Read the Report (PDF)


 

Important research disclaimers.

For more information, please contact your Financial Advisor.

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