The latest Consumer Price Index report indicates that inflation is no longer a pressing issue, with overall CPI rising 2.9% over the past year. From Axios, this allows the Federal Reserve to focus on the weakening labor market and potential interest rate cuts. While grocery and used vehicle prices have decreased, housing costs continue to exert upward pressure on inflation. Additionally, mortgage applications have reached a 19-month high, driven by lower long-term interest rates, although overall mortgage activity remains low compared to historical levels.
The American consumer showed surprising strength in July, with retail sales rising 1%, indicating resilience against recession fears.
A Gallup-Bentley University survey reveals that fewer Americans (38%) want companies to take public stances on political issues, marking a 10-point decline since 2022, particularly among previously supportive groups. This shift may be due to fatigue, and companies risk losing consumers by endorsing political candidates. While LGBTQ+, Black, and Democratic individuals still favor corporate activism, businesses are increasingly cautious, focusing on internal communications and prioritizing topics like mental health, climate change, and diversity.
Why do we care?
Vibes are different from data, and it will take time for consumers to “feel” better. That said, if we are considering consumer sentiment, it should be more positive as we move into the fall.
I included the political data because of it’s timeliness – with an election in the US looming, many businesses may be best served by staying out of political commentary for the future. Lean into the potentially good news on the economy and away from potential political risks. Less than 90 days to the election anyway.
