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Is the United States sounding the stagflation alarm? Powell's speech sends dollar down
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market www.xmmen.commentary]: The United States sounded the stagflation alarm? Powell's speech caused the dollar to collapse." Hope this helps you! The original content is as follows:
Deloitte survey data shows that 57% of U.S. consumers (i.e. the majority group) expect the economy to weaken in the next year. This is the most pessimistic expectation recorded by the consulting organization since it started tracking consumer sentiment in 1997.
On average, American consumers plan to reduce spending by 10% during this holiday season. The core motivation is to proactively search for preferential channels and have predicted in advance that prices will rise.
The contraction in spending is particularly significant among Generation Z, who said they plan to reduce spending by 34% www.xmmen.compared with last year’s holiday season.
www.xmmen.comparison of survey background and economic expectations: more pessimistic than 2008
Deloitte's annual survey released on Wednesday showed that as the holiday shopping season approaches, the majority of American consumers are pessimistic about the current economic situation.
A survey of about 4,000 respondents conducted by the consulting agency showed that 57% of consumers surveyed expected the economy to weaken in the next year. By www.xmmen.comparison, on the eve of last year's holiday season, only 30% of consumers expected the economy to weaken; in 2008, one of the representative years of the Great Recession, this proportion was 54%.
This data marks that consumer expectations for the economy have dropped to the most pessimistic level since Deloitte started tracking this indicator in 1997.
The resilience of U.S. consumers may be www.xmmen.coming to an end
Deloitte data shows that 77% of respondents expect the prices of holiday goods to rise, an increase from 69% last year. The current holiday season is the first after former US President Donald Trump imposed the latest round of tariffs on a large number of imported goods.
Deloitte retail strategy leader Brian McCarthy noted: “For a period of timeSince then, we have been discussing consumer resilience—despite facing multiple pressures, U.S. consumers have continued to consume, and retail spending has continued to grow. But current expectations suggest that this resilience may be www.xmmen.coming to an end. ”
All income levels in the United States plan to reduce spending
Consumers’ pessimism has been transmitted to their holiday season spending plans. Deloitte’s survey shows that due to anticipating rising prices in advance, consumers plan to spend an average of US$1,595, which is 10% lower than the planned spending of US$1,778 in the same period last year.
Deloit Qin found that households at all income levels and almost all generation groups are expected to reduce their holiday spending. Among them, young consumer groups have a particularly sharp contraction in spending.
Generation Z consumers aged between 18 and 28 years old in the survey said that they plan to spend more on average during this holiday season than last year. A 34% decrease; Millennial respondents aged 29 to 44 expect an average 13% decrease in spending this holiday season.
In contrast, Generation X plans to increase spending by an average of 3%, while Baby Boomers expect to spend an average of 6% less.
McCarthy analyzed that for Generation Z consumers, the core reason for tightening holiday budgets is that they face higher uncertainty and instability in the early stages of their careers.
He further explained: “This group is highly concerned about income levels and job market dynamics, and concerns about the economic situation will put greater pressure on them because they have not yet had enough time to accumulate savings, nor are they prepared for the economic downturn. ”
Mike Daher, head of Deloitte’s U.S. consumer industry, added that in addition to rising prices for daily necessities such as groceries, Generation Z is also “facing significant inflationary pressures related to housing costs.”
“Value for money” has become the core, non-gift spending has shrunk significantly, and gift spending has shrunk moderately
Deloitte’s Macca Xi emphasized that although various organizations have different expectations for the holiday season, "price-performance orientation" will become one of the core themes of this holiday season. Even in the past few months, Deloitte has observed a significant increase in the number of American consumers who report that they will actively look for discounts.
Deloitte's survey shows that 70% of respondents will do so regardless of income level. Take three or more "benefit-seeking behaviors", such as purchasing private-label products or alternative ingredients, increasing the frequency of home cooking, and purchasing second-hand cars.
Given that consumers will strictly control their budgets, they told Deloitte that they will reduce non-essential spending related to the holidays. On average, consumers plan to reduce holiday non-gift spending (such as hosting parties, purchasing clothing and decorations, etc.) by 22%.
However, the decline in gift spending has been relatively modest. Survey respondents said they plan to purchase an average of 8 gifts (compared to 9 in the same period last year) and spend an average of $536 on gifts (compared to $505 during last year's holiday season).
Key sales cycle is under pressure, multiple agencies predictThe growth rate of holiday consumption slows down
For retailers and brands, the above survey results sound a warning signal for the most critical sales cycle of the year. Other holiday spending forecasts also show that U.S. households are expected to scale back holiday spending, while still reflecting consumers' core needs to decorate their homes and give gifts during the holidays.
Bain Consulting, a consulting firm, predicts that holiday sales in physical stores and online channels will increase by 4% year-on-year, lower than the ten-year average growth rate of 5.2%. Another report from Adobe Analytics shows that online holiday spending in the United States is expected to grow by 5.3% year-on-year, but this growth rate is lower than the 8.8% year-on-year growth rate in the same period last year.
Consistent with Deloitte’s survey, PwC’s survey also shows that Generation Z consumers will reduce holiday spending. This group said they plan to reduce spending by 23% www.xmmen.compared with the same period last year. PwC data shows that overall, consumers are expected to spend about 5% less on holiday gifts, travel and entertainment than the same period last year, with the average total spending amounting to US$1,552.
The National Retail Federation, a major U.S. industry trade organization, plans to release its holiday consumption forecast report in early November.
Powell’s speech echoed the data survey, and the U.S. dollar index was under pressure
The survey verification of the data also corroborated Powell’s speech. In his speech on Tuesday, Federal Reserve Chairman Powell pointed out that the Federal Reserve may be about to end its long-term efforts to reduce its balance sheet, which is known as quantitative tightening.
Powell emphasized that U.S. employment growth has slowed significantly and may weaken further. Powell pointed out that data before the shutdown showed that economic growth may exceed expectations, but he also emphasized that "downward risks to the U.S. job market have intensified."
He acknowledged that the missing government data is the "gold standard" but added that the Fed is using private data sources as an alternative basis for judgment, and Powell has become more dovish on monetary policy.
This statement made the market believe that the Federal Reserve is gradually entering an interest rate cutting cycle, and as a result, the U.S. dollar index began a correction.
The above content is all about "[XM Foreign Exchange Market www.xmmen.commentary]: The United States sounded the stagflation alarm? Powell's speech sent the dollar down". It was carefully www.xmmen.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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