Shop till you drop

Yes, Q3 consumer spending was a blow out but the quarter ended with a savings rate of just 3.4% vs 4% in August, 4.1% in July, 4.9% in June and 5.3% in May. I'm sensing a trend. That matches the lowest since November 2022. Btw, that compares with a savings rate of 7.7% in February 2020 and thus the current pace of spending in Q3 is just not sustainable at that pace. Higher income consumers are mostly spending on travel, restaurants, and other hospitality things. Most others are prioritizing their spend on essentials. Everyone is spending on live entertainment like concerts from Taylor Swift and others. We continue to be long and bullish on Live Nation.

This lower savings rate comes after a .3% rise in income and a .7% increase in nominal spending. Spending on services were higher by .8% m/o/m and by .7% for goods driven by a 1% rise in durable goods, most likely led by vehicles. Private sector wages and salaries were up .3% m/o/m while government wages jumped .7% m/o/m.