Aggregate consumer data remains solid despite signs of a slowdown in labor markets. Declining labor supply accounts for some of the labor weakness but other metrics, including the ratio of job vacancies to unemployment, suggest softness in demand as well. We examine why consumption has held up despite these signs of weakness and part of it comes down to the wealth effect, which has boosted some consumers at a time that others have been challenged by continued cost increases and a slowdown in wage growth. We also discuss the sources that investors can use for economic data given that Federal data is currently limited. And get into some of the risks to spending, particularly since equities have been unusually strong over the last several years, leading to questions around whether weak or stagnant equities could remove a key support for consumption. Could announced and future capex investments in the US spark renewed demand for labor? We address this as well, and so far, our US Economics team isn't holding its breath.

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