More evidence of our mixed economy/All that glitters can also be silver/Other

Is the US economy strong like I still hear some say or much more mixed as I believe? More evidence yesterday from Ulta Beauty that it's much more mixed. Here is what they said that resulted in a 15% drop in its stock, coming from a very healthy space within in retail in terms of persistent demand:

"Economically, there's kind of mixed data points around the economic situation for the majority of consumers with healthy employment rates, wage growth, but also pressures that we see with rising credit card debt, student loan dynamics, other pressures that we certainly within our guests. Then more broadly, we know what's going on in the world around us, whether it's some of the political challenges, global complex and then our political environment here as we go through an election year. So it just creates this soup of activity for our consumers that they're trying to navigate through."

And here is what it means for their business, "What we're seeing right now as we're two months into our fiscal year, we have seen a slowdown in the total category. That category has grown - we came into the year and we talked about this on our call a few weeks ago - but expecting the category to moderate it after several years of very strong growth...So we have planned for moderation in total category growth to kind of the mid single digit range."

And then this, "What we've seen so far is a slowdown in the total category across price points and segments. That's a bit earlier and a bit bigger than we thought. Still growing, still a lot of engagement, all those things that I've had, but we've seen this growth rate come down probably faster than we anticipated."

With 7 Fed members speaking today, I recommend some Advil. Most of them expect to cut rates this year with only the degree in doubt, as we know, and this rise in energy and other commodity prices are only complicating the decision making. Powell mentioned yesterday inflation expectations being calm and taking comfort in that but I guess he hasn't yet noticed the one year high in 5 yr breakevens. 

One VERY important and costly piece of one's cost of living, and experienced by homeowners and only indirectly by renters, is property taxes. If there is an inflation aspect that is NEVER transitory and NOT calculated in CPI and PCE in the housing component it is property taxes. Bloomberg News has a story today titled "US Homeowners See Biggest Property Tax Rise in Five Years." It says that data collected by ATTOM, a real estate data firm, reflected an average 4.1% rise in 2023 while in total dollars, it was up 6.9%. The CEO of ATTOM said "Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of the country remained in place." Congrats to those who live in Essex County, NJ (which I did for 21 years) who pay the highest average property tax in the country.