It’s All About Consumption

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Looking at durable goods consumption highlights an interesting case. As shown in the chart, our US Growth Nowcaster has seen a large recovery but remains anchored around the zero level. This is partially explained by its Durable Goods Order component: Michigan University produces a compelling survey on the willingness of consumers to undertake purchases of large household durable goods. So far, and in spite of the global recovery and very low interest rates, households have shown reluctance to invest in durable goods. The lack of future visibility can explain this, but the chart makes clear that this is a common feature of most recoveries. Therefore, as this consumption starts to take place, we are likely to see even higher growth than that expected by many forecasters and this will feed in to higher inflation.


It’s All About Consumption

Source: Bloomberg, Unigestion. Data as at 31 March 2021.

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