American’s Turkeys Are Getting Colder – Brace for a Dim Christmas

The latest US consumer sentiment index dropped to a three-and-a-half-year low, with Americans worried about the future of the US economy. With the longest US government shutdown, Americans are feeling the pinch, with the lowest-income households suffering the most.

The change in consumer shopping behaviour is seen in the fall of the SP 500 consumer staples index, down 0.4% this year. This indicates the change in attitude towards non-essential spending, with more households opting to purchase just essential products. Therefore, it is evident that the substitution effect is seen in the 0.4% drop, where price rises have made households switch to cheaper alternatives.

The lack of US data due to the government shutdown hasn’t given the full picture of what households are feeling. Unemployment rate was recorded at a four-year high of 4.3% in August, but since then, additional tariffs and further layoffs have contributed to worse living conditions. It is a worrying sign for a faltering economy. Lesser household demand can impact sales on branded goods – potentially leading to unhealthy alternatives such as fast food or HFSS products. One thing is certain – it may be a Christmas with pork rather than turkey with the rate of price increases in the US.