The early-week US economic highlight will be CPI and that will dominate the conversation until it's released but on Friday there could be a new set of worries with the release of December retail sales.
The consensus is +0.1% on the headline, +0.3% excluding autos and +0.2% on the control group.
Bank of America has tabulated its credit card spending data and thinks it will be much worse. They're forecasting -1.3% on the headline, -1.6% ex-autos and -2.1% on the control group.
Part of the reason is something I've been writing about for years -- that holiday shopping is being done progressively earlier. That was especially the case in 2021 as consumers were warned about shipping delays and bottlenecks. That factor exaggerated gains in October (+1.8%) and December will be the payback.
They also note that restaurant spending slowed sharply in December as omicron hit, suggesting consumers are hunkering down.
Restaurant spending growth decelerated to 5% on a 2-yr basis, likely on concerns around the Omicron variant pic.twitter.com/q18o5RbSY6
— Mike Zaccardi, CFA, CMT (@MikeZaccardi)
In previous covid waves, consumers could rely on government handouts but
this time, spending among income groups earning less than $50K has slowed noticeably.
Credit card spending slowed noticeably on a 2-yr basis for the lower income group while debit card spending remained steady pic.twitter.com/bF8eZJtGpw
— Mike Zaccardi, CFA, CMT (@MikeZaccardi)
As more credit card data is released and economics lower estimates, that could add to the risk averse tone.