By coinnews 
00:00 Speaker A
And so there was in that April retail sales report this morning there was one data point, I saw some economists um emphasizing, which was they pointed out this continued strength in restaurant receipts. And I saw some economists saying that was really interesting to them because maybe they were telling their clients that suggests that consumers are actually in more of a spending mode than the sentiment measures would be signaling. And I was just interested what what you made of that.
00:35 Speaker B
Oh, 100% the sentiment versus the reality. Um there’s big gap. The surveys have been showing that consumers are worried, they’re talking about concern over business conditions in the next year being weaker. They’re concerned about higher inflation in the future. Um, but those are all concerns because again of partly the market volatility, the headlines, the uncertainty that has overwhelmed the economic narrative in the last several weeks. But what are they seeing? They’re still seeing a labor market that is robust, they’re still seeing paychecks coming in, they’re still seeing support from our purchasing power perspective. So they’re spending. And I think as we look forward, one of the things that we’re going to be focusing on a lot at at The Economics Institute, given the breadth of data that we that we that we focus on, we look at is whether or not there’s going to be basket shifts in response to tariffs and price increases. So if it becomes difficult to get an item because of supply chain distortions, or if it just becomes too expensive, do consumers, to the extent that they can, shift into other types of purchasing, where restaurants can get really interesting. Or the experience economy, which is not as directly impacted by tariffs, could end up seeing some advantage.
02:49 Speaker A
Have you all seen any shifts in your in your data um as of yet? Whether it’s because of that and those kinds of shifts, or any kinds of shifts this year that would indicate any kind of change?
03:07 Speaker B
It it looks usual. The shifts that we’re seeing are typical seasonality, um the typical movements that you would see in terms of the consumer in the first quarter. There aren’t indications that the economy is moving um decisively in one direction or the other. Um, so that’s where this disconnect between the dramatic moves in the surveys versus nuanced moves in the hard data comes into play.
03:52 Speaker A
And Michelle, so there’s still spending, I’m curious, how would you characterize the financial health of consumers? How would you characterize that? How would you describe that?
04:06 Speaker B
So when you break down the drivers of spending, there’s income creation, and then there’s the balance sheet, the household balance sheet, which is both wealth and debt. From an income creation perspective, it’s a function of the labor market. So if you look at a measure of um aggregate wages, which takes into account the total amount of jobs created and how much, on average, people are getting paid, it’s still quite strong. It’s still running pretty much the rate that we had seen the second half of last year, where we had what we all know is a robust economy with a strong consumer during the holiday season. Um, so we’re going to monitor that, right? The weekly jobless claims numbers, like we got this morning, are going to be important. So far, no movement on jobless claims. You’re not seeing an increase in people filing for unemployment insurance. Um, and then you have the balance sheet. And that’s where I think there was a lot of focus on the volatility in the market, with the sell-off that felt painful at times in the stock market, creating what could have been a negative wealth effect. But that has since popped back, as we all know. And the wealth effect is not what happens in the equity market over a three week period, it’s what happens over a three-year period. So consumers are responding to changes in net worth over that period of time, which has largely still been positive.