Michelle Weaver, a U.S. thematic and equity strategist, interviews Arunima Sinha from the Global on U.S. Economics teams to discuss the health of the U.S. consumer. While anecdotal evidence from earnings season suggested a cautious consumer, macro data indicates strong consumer spending in Q1 2025, driven by steady labor market compensation. However, consumer sentiment varied across different surveys, with some showing a rebound linked to reduced tariff concerns. The discussion explores the impact of tariffs on consumer behavior, including pull-forward purchases, and analyzes the potential for tariffs to influence inflation in the coming months. Finally, the conversation touches upon the potential effects of the recently passed House tax bill on different income groups and concludes with a forecast of slowing consumption growth in 2025 and 2026 due to factors including slowing labor market growth, tariff-driven inflation, and market volatility.
