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📈 Economy Sending Mixed Signals About Consumer Spending

Real gross domestic product (GDP) increased by 3.3% in Q2, not 3.0% as originally reported.

The government revised the number up 0.3%, “primarily reflecting upward revisions to investment and consumer spending…”

More significantly, “final sales to private domestic purchasers,” which measures core demand and strips away noise in the numbers from trade distortions, rose 1.9% in Q2 – revised up from 1.2%.

Consumer spending is a major reason why the economy is performing well, and why S&P 500 companies are largely reporting positives during earnings calls.

On the other hand, Dollar General (+44% at the time of this writing) and Dollar Tree (+43%) are far outperforming the most successful AI and chip company in the world, Nvidia (+26%).

Dollar General beat expectations across the board, it revealed during its earnings call on Thursday.

“It does underscore how more consumers are looking to stretch their dollars after years of compounding inflation and high interest rates,” Phil Rosen, author of Opening Bell Daily, said.

“All this points to a broad flight to value for shoppers. Ultra-discounted stores have thrived while traditional big-box retailers plus the world’s favorite online retailer [Amazon] have lagged.”

And how about this headline: “McDonald’s is cutting prices of its combo meals to convince customers it’s affordable again.” It’s a microcosm of the world of fast and fast-casual food right now, with the cheapest and best value excelling more than in typical times.

It’s an interesting juxtaposition: On the one hand, U.S. consumer spending is propping up the economy, and on the other hand, many of us seem to be begging for more and more value.

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🎙️ Podcast

Should we fall in love with dividends? Fiduciary financial advisor Wes Moss tackles the classic debate of stocks versus bonds with a deep dive into the power of dividends. Using data going back 45 years to 1980, Wes reveals how an investment in the S&P 500 would have dramatically outperformed bonds, with dividends growing by an incredible percentage. Also, Wes shares a fascinating look at the future of American manufacturing. He draws a comparison between the 1950s and today, highlighting the huge growth in productivity and innovation. Wes argues that the next big frontier for economic growth might not be in Silicon Valley, but in the heart of the Midwest, thanks to modern-day "George Jetsons" and a renewed focus on high-tech manufacturing.

☎️ Need Money Help?

The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.

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