Analyzing Economic Indicators

More data that is not in sync with Govt’s Q1FY26 7.8% GDP growth claim 📛📛 - Personal Loans: Growth has slowed to 11.9% from 14% a year ago. People are borrowing less for their needs - Credit Card Spending: Growth has collapsed to just 5.6% from a strong 22% last year. This is a massive drop in discretionary urban spending - Vehicle Loans: Growth has nearly halved, slowing to 8.9% from 14.6%. Fewer people are buying new cars and bikes - Housing Loans: Even the dream of owning a home is seeing caution. Growth here has moderated to 9.6% from 12.8% These numbers were published by ET on 29 August, with one caveat, that these are for Q1 + July. .. This isn't just about big-ticket items. The slowdown is visible everywhere. Credit growth to our vital agriculture sector has plummeted to 7.3% from 18.1% a year ago. This signals deep stress in the rural economy, a massive driver of national consumption. .. The industrial and services sectors are not immune. - Credit to industry has slowed to 6% from 10.2% - The services sector saw its credit growth slow to 10.6% from 14.5% When businesses borrow less, it means they are producing less and investing less, likely because they see weaker demand ahead. .. So, what is growing? There is one alarming indicator. Gold loans are surging, with an outstanding growth of 122% year-on-year. People are pledging their family gold for loans. This is often a sign of household distress, taken when other credit lines dry up and money is needed for urgent, non-negotiable expenses. A staggering rise in distress borrowing alongside a sharp fall in aspirational borrowing paints a picture of an economy under strain. .. While the headline GDP figure presents a rosy image, the credit data from the ground level shows an economy grappling with a real consumption slowdown. The story isn't in the headline number alone. It's in the details. And the details are asking some very tough questions. .. PS: I share several biz/economy deepdives daily, with 33k+ people on WhatsApp. Check out here: https://lnkd.in/dfWQgxKd Best, Jayant

We've now had a sizable number of retail and consumer results come through for the third quarter. There are many more to come over the next few weeks, but here is an early read on sales: 🟢 There's more growth than shrinkage and the balance will shift more towards 'green' when we get the results from the bigger players. The consumer is cautious, but is still spending. 💔 Most of the revenue slides come from players with proposition problems; they're not the fault of a bad economy, tariffs, or other external factors. Solo Brands and Allbirds are examples on an extreme scale. Capri is another. 👜 We have not heard from many of the value players yet, hence their absence on the chart. However, there are plenty of premium brands in growth. Tapestry and Ralph Lauren among them. So value, not price, is what really matters. 🛍️ The other thing that helped many of those in growth is capturing new customer share. Ralph Lauren and Tapestry did it through appealing to Gen Z. ThredUp has done it because resale is tapping a wider audience. Boot Barn has done it because, well, folks are crowding into the western-wear. If you want superior results, you need to 'steal' share and customers. 🛋️ There has been a comeback for most furnishings players, largely because consumers are trying to get ahead of tariffs and the purchase cycle has reached its nadir. This is not a full recovery, it's just an upswing from the long decline. 📈 The non-weighted average growth rate is 2.2% so far. For this same basket of retailers, Q2 growth came in at an average of 3.3%. Overall Q2 average growth for all reporting retailers was 4.1%. #retail #retailnews #earnings #Q3 #economy #consumer #spending

We’ve updated our #rate forecasts post-election, based on three main assumptions: 1) The #Fed will continue cutting rates, but may proceed more cautiously and maintain some optionality along the way; 2) The economy will continue to grow around trend near term; 3) A Republican sweep raises the prospects of fiscal expansion, which increases growth and inflation expectations. We still believe the direction of travel for interest rates is lower as any policy changes will likely take time to be finalized and implemented, the labor market continues to loosen, and the terminal rate has already repriced higher. But we now see the 10-year US Treasury yield trending towards 4% by June 2025, up from our previous forecast of 3.5%. Read more below.

How falling consumer sentiment is testing business resilience? A single data point from the U.S. can echo far beyond its borders. November’s plunge in American consumer sentiment, now at its lowest level in three years isn’t just a domestic signal of anxiety; it’s a warning pulse for global demand and corporate stability. As households tighten spending, the ripple travels across supply chains, from European exporters to emerging-market manufacturers. At the same time, a new wave of corporate layoffs from Amazon’s warehouse divisions to Nestlé’s regional restructurings and IBM’s AI-driven head-count reductions is reinforcing a feedback loop between sentiment and strategy. Leaders everywhere are being tested: How to protect margins and liquidity without eroding the confidence that keeps economies moving. In this edition, We explore how declining consumer confidence reshapes business resilience from the inside out affecting sales velocity, inventory cycles, and financial planning. Using the latest November data, we unpack what these sentiment shifts mean for decision-makers navigating slower demand, tighter liquidity, and an uncertain labor outlook.

Trade tensions & policy uncertainty come at a significant cost to global growth—one the world cannot afford.   Our new #GEP25 highlights the consequences of ongoing turmoil:    Global growth is projected to slow to 2.3% this year, its slowest pace since 2008 outside of global recessions.    Growth forecasts have been lowered in nearly 70% of economies across all regions and income groups.    By 2027, average global GDP growth for this decade is expected to be just 2.5%, the lowest rate since the 1960s.    Without sustained growth, developing countries won't be able to create jobs and reduce poverty.    Now, global growth could rebound faster than expected if major economies are able to mitigate trade tensions.    Read more: https://lnkd.in/ehtUDQ3B

Consumer confidence edged up in November to its highest level in more than a year. It is driven by improved sentiment about both the current economic situation and future expectations. The consumer confidence index rose to 111.7 from an upwardly revised 109.6, the Conference Board reported on Tuesday. The main driver of the increase in confidence continues to be better labor market conditions, as survey respondents noted that new jobs were less difficult to find this month. Together with the subindex for jobs remaining plentiful, the labor differential subindex—one of the key indicators we focus on—reached its highest level since June. The back-to-back rebound of the labor subindex from September’s low is a significant sign that the labor market should rebound strongly in November after posting a disappointing number of jobs added in October due to several one-time shocks. We expect the unemployment rate to remain at 4.1%, while the net payroll number should spike back up to between 150,000 and 200,000. The overall improvement in confidence also signals that consumer spending, fueled by a strong labor market, should continue for the remainder of the year. This sets the stage for stronger growth in 2025, as outlined in our year-ahead forecasts. One factor fueling this increased confidence is the decline in inflation expectations for both the short term and long term. However, these expectations are at odds with the stronger growth anticipated in 2025, which will likely bring higher inflation. Of course, consumers’ expectations about inflation won’t shift significantly until we have a clearer picture of how higher tariffs and tighter immigration policies will play out in practice. In the meantime, these lower inflation expectations should continue to support robust consumer spending.

Global Government Debt: A Closer Look at the Numbers The IMF's latest data (April 2025) paints a sobering picture of government debt across the globe. The Debt-to-GDP ratio, a key indicator of a country's fiscal sustainability, continues to vary widely—from alarming highs to notable restraint. Sudan has now surpassed Japan, becoming the country with the highest debt-to-GDP ratio at 252%, overtaking Japan’s 235%. This is a critical shift, highlighting intensifying fiscal stress in developing economies. 🇸🇬 Singapore (175%), 🇮🇹 Italy (137%), 🇺🇸 United States (123%), and 🇫🇷 France (116%) are also among the nations with debt levels exceeding 100% of GDP. On the other end, Germany stands out as the G7 nation with the lowest debt-to-GDP ratio, at 65%—demonstrating a relatively conservative fiscal stance amid global turbulence. Why it matters: High government debt can constrain future policy flexibility, crowd out investment, and heighten vulnerability to external shocks. Conversely, manageable debt levels can support economic resilience and investor confidence. In an era of rising interest rates and geopolitical uncertainty, debt sustainability will remain at the forefront of macroeconomic strategy and risk assessment.

Q1, 2024 reports of Canada's Big 6 Banks: Their loans write-offs are at a 2-year high! While the substantial Allowance for Credit Losses (ACL) indicates banks were braced for these write-offs, the trend suggests loans are becoming riskier due to macroeconomic pressures, including: 1. Elevated interest rates 2. Increasing debt levels in Canada The Q1 2024 write-offs are as follows: Scotiabank $BNS: $804M $TD: $759M $BMO: $533M RBC $RY: $454M CIBC $CM: $445M National Bank $NA: $81M Excluding Scotiabank, which already reported a large Provision for Credit Losses (PCL) last quarter, there was an increase in PCL for the other banks from the previous quarter. This suggests that banks are anticipating large write-offs in the upcoming quarters.

New economic shocks keep coming, landing on weaker fiscal grounds. The pandemic. The cost of living crisis. Trade disruptions. Historically high interest rates. And now, war in the Middle East. All layered onto public finances that never fully recovered. The newest Fiscal Monitor published today shows global government debt is set to reach 100% of GDP by 2029 – two years earlier than expected. Interest costs have jumped. A prolonged conflict in the Middle East would further raise debt risks. Governments must act now to preserve stability. When fiscal space is lacking, short-term fiscal support should be budget neutral and limited to protecting the most vulnerable. Read more of the report’s insights: https://lnkd.in/efQb7vbz.