JPMorgan, Jefferies data reiterates a bifurcated consumer

JPMorgan (JPM) and Jefferies (JEF) recently released fresh consumer sentiment data. Yahoo Finance Senior Reporter Brooke DiPalma joins Allie Canal on Opening Bid to discuss the reports and the state of the consumer.

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Video Transcript

00:00 Allie

and we did just receive new surveys from Jeffries, JP Morgan talking about this K-shaped economy. Brooke, you've been covering the consumer closely. What did those surveys tell us? And does that line up to what we've been hearing from companies across the landscape?

00:15 Brooke

Ally, what we heard from JP Morgan this morning was really once again that bifurcation, but also the confidence within the US economy is different between low, middle and higher income consumers. Higher income consumers are about two percentage points more confident in the trajectory of the US economy following last year's president presidential election and moving into this year. as as uh compared to the lower and middle-income consumer. and more importantly, what they said was that higher income respondents said they were planning to increase spending on discretionary goods over the next year, more so than those other middle and lower income consumers. And that's something that retailers have really been waiting for, that return to discretionary spending. Now, on the flip side, we also heard from Jeffries and Jeffries pointed out that right now, discretionary growth has weakened even further. What Jeffries pointed out was that the contraction is becoming more pronounced not only across low and middle-income consumers, but also for higher income consumers as well. Now, on the flip side, they did say that this year's post summer slump. So there's there's back to school season and then there's the holiday shopping season. Then we sort of have this weird in between, that September point. They they said that the post-summer slump is more pronounced than in years past. And this is really a consumer that has been driven by being extremely value focused, but also really focused on those consumer staples, on those essential goods like food and baby food and and things of that nature that they really need to have. And that's why we've seen companies like Walmart and also those dollar stores really outperform this environment.

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