Latest / Market Pulse / Holiday Spending Outlook: Are Consumers Feeling the Pinch?

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Holiday Spending Outlook: Are Consumers Feeling the Pinch? · Market Pulse

• 0:02
  Welcome to the Market Pulse Podcast from Equifax,
• 0:05
  where we break down the latest economic and credit insights to help you navigate
• 0:09
  today's business landscape.
• 0:15
  Welcome to the Market Pulse Podcast. I'm your host, Dave Sojka,
• 0:18
  a member of the Equifax advisory team.
• 0:21
  The Equifax advisors align strategy and execution by translating economic and
• 0:26
  industry trends into practical data-backed insights and stories for a
• 0:30
  competitive edge. This episode,
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  we're taking the pulse of the American consumer as we head into the final
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  quarter of the year.
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  I'm joined by only a portion of our advisor team as Emmaline is out west on
• 0:41
  assignment, and Tom is awaiting the birth of his first grandchild.
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  So let's welcome Maria Urtubey and Jesse Hardin. Hey, Dave. Hello.
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  How's it going? Good, thanks. You have the be the best members of the,
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  of the staff, right? Yes, we do. That's what we want to believe.
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  Don't tell anyone else. We get to say that if we're here.
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  Before we dive deeper into that consumer spending and our game headline
• 1:01
  or hallucination,
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  we'd like to invite Justin Begley from Moody's to share a macroeconomic update.
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  The US economy is growing steadily at about its potential rate of 2%,
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  but it's facing several headwinds.
• 1:15
  Chief among them right now is rising interest rates.
• 1:18
  The Federal Reserve raised the federal funds rate by a quarter percentage point
• 1:22
  in September to a range of 3.75% to 4%,
• 1:26
  its first increase in more than three years.
• 1:29
  And global investors expect one more rate hike this year and a couple more next
• 1:34
  year. Now,
• 1:35
  long-term rates have also risen sharply since the Iran war began in late
• 1:39
  February,
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  and the 10-year yield has risen from less than 4% just before the war to more
• 1:44
  than 5%.
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  The proximate cause of higher rates is the war in Iran,
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  while other economic policies,
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  including higher US tariffs and restrictive immigration policies are also
• 1:55
  contributing.
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  And these ge- geopolitical and political factors have lifted inflation,
• 2:01
  which has forced the Fed to shift from signaling rate cuts earlier this
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  year to tightening monetary policy now. And by our estimate,
• 2:10
  together these policies have added nearly one percentage point to core inflation
• 2:15
  over the past year. On the eve of the war,
• 2:18
  futures markets were priced for a funds rate below 3% by the middle of next
• 2:22
  year, but they now expect it to be in the mid 4% range.
• 2:27
  Now about half of the increase in the 10-year yield since the war began reflects
• 2:31
  investors' expectations for tighter Fed policy, according to our decomposition.
• 2:35
  Most of the other half reflects a wider term premium or the kind of the extra
• 2:40
  yield that investors demand to hold long-term bonds.
• 2:44
  Inflation expectations, however,
• 2:47
  account for very little amount of the increase,
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  which suggests that the Fed's inflation fighting credibility remains intact.
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  Now, other factors are also widening the term premium.
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  Investors are less sure about inflation and how the Fed will conduct policy
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  under Chair Kevin Warsh who believes that monetary policy should be less
• 3:07
  transparent.
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  There's also worries about Fed independence that are adding to the unease.
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  But really more than all those things,
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  the nation's daunting fiscal situation is playing a role as global investors
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  demand more compensation for sovereign debt risk.
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  The federal budget deficit is running at about $2 trillion a year,
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  more than 6% of GDP,
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  and the debt held by the public already about 100% of GDP is conservatively
• 3:33
  on track to reach 125% of GDP a decade from now. Tellingly,
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  long-term rates have risen the most this year in heavily indebted nations,
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  including France, Italy, Japan, the UK,
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  and the US while rising much less in countries with more
• 3:50
  sustainable budgets like Switzerland.
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  We expect the Fed will hike one more time this year by 25 basis points in
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  December. But contrary to market pricing,
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  we think the Fed will avoid further increases late next year as effects of the
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  supply shock from the Iran war start to fade.
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  Long-term rates are also expected to moderate,
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  but the 10 year will fall back to about the mid 4% range by the middle of
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  next year, remaining high.
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  And mortgage rates will also keep closer to 6.5% by late next year.
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  Thanks, Justin. As we dive into our podcast,
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  we're going to get a market pulse credit trends highlight from Maria.
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  Maria, take.
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  It away. Thank you, Dave.
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  Driven by first mortgages and revolving card balances the total US
• 4:36
  consumer debt sits at 18.5 trillion.
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  Origination growth remains robust,
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  up double digits year over year in all categories other than auto.
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  However, remember our data is lagged and it's.
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  They don't yet fully reflect the broader housing cool down or
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  subsequent shifts in borrower demand.
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  If we turn to the August portfolio performance,
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  delinquencies remain generally stable across most categories,
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  though there's some cross currents visible already. , While auto, bank card,
• 5:11
  and personal loans severe delinquencies show annual improvements,
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  they are being partially offset by the rising mortgage delinquencies.
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  Simultaneously,
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  the latest Market Pulse Index report highlights a critical milestone
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  for the first time in three years,
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  the widening gap in the case-shaped economy cost.
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  It's a data point for the quarter, not a trend,
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  but we are observing that the high-end thriver segment has grown,
• 5:41
  the middle expanded slightly,
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  and the sensitive striver group contracted by 4.2%.
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  That's your monthly credit update.
• 5:50
  Be sure to tune to Tom's complete consumer credit trends in la-
• 5:55
  latest Market Pulse webinar recording.
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  Thanks, Maria. And maybe we'll,
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  we'll touch on some of those points as we get into our discussion.
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  In our role as Equifax advisors,
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  we review a lot of data on the state of the economy and consumer finances,
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  but we also make a point of bringing that data into the context of what is
• 6:13
  happening in the world and what is happening with the US consumer. In doing so,
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  we often c- come across reports and stories that seem hard to believe.
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  So we've decided to challenge ourselves and you, our listeners,
• 6:26
  to determine what is believable and what is not.
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  The game is called headline or hallucination. The rules are simple.
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  Jesse will share a story with some interesting statistics,
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  and it is our challenge to determine if the story is true or not. Jesse,
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  take it away. Thank you very much, Dave.
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  That's my that's my game show voice. Happy to,
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  to play headline ha- hallucination this month.
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  I'm going to throw a little bit of a curve ball since we are two advisors short.
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  I actually found instead of one headline hallucination, I found three.
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  All right, so here we're starting out with the first one.
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  One in four Americans financing a new car now take out a loan that
• 7:13
  lasts at least seven years. So how about Dave? What do you think?
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  One in four seven year loan. True.
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  I'm going to say that's a headline. Okay. Maria,
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  how about you?
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  New and used cars? It includes.
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  Everything? I figured Maria would, would, would quantify.
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  This is for new vehicles.
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  Okay. But I'm with Dave. I also second that. I think it's true.
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  All right. So you guys are starting off well. That is true.
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  That is a completely true headline.
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  A record of 25.5% of financed new vehicles purchased in Q3
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  had a term of 84 months or longer. Mm. Fun fact, 21%.
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  I guess it's not... I don't know that it's that fun,
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  but 21% of new vehicles had a payment of at least $1,000 a month.
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  So certainly we can see that consumers are,
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  are building into debt more with cars, stretching out that payment and,
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  and paying for more expensive cars. Mm-Hmm. All right. So that,
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  that kind of eased you into it. Let's do the next one.
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  So nearly 45% of small businesses trying to hire couldn't find enough qualified
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  applicants even as the US added 29,000 jobs. You know,
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  I know that there's a challenge around you know, mismatches.
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  Are you finding the right skills for the right job? But I'm wondering if that,
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  that 45% number is right. So I'm going to say hallucination this time.
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  So I think, I think there's a problem. I just,
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  I just disagree with the percentage. Okay.
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  And I'm, I'm thinking similarly about that mismatch. And as you're saying,
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  Jesse the, the areas that they're hiring into,
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  I know that manufacturing construction healthcare have been
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  the ones driving the rise.
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  But I do believe it's true that they're having a hard time even in
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  specific pockets and overall in hiring. I'm sticking with true.
• 9:12
  Sticking with true. Okay. Yeah. So Dave, you are correct.
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  It is a hallucination. And Dave, you're, you are also correct.
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  It's a hallucination.
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  Can you guess to the upside or the downside of the percentage?
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  I'm going to say you overstated it. It should be slightly overstated it. Yeah.
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  So, okay. So here's what's interesting is I did not overstate it.
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  I understated it. Oh, Wow. Based on the NFIB,
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  so that's the National Federation of Independent Businesses, 90%,
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  so almost 90% of businesses surveyed reported that they had a hard
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  time finding enough qualified applicants.
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  So I thought that was really staggering.
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  I think it kinda shows some of the disconnect that we see in the job growth data
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  and then how it translates into some of the survey data. Hopefully,
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  we can get into some of the survey questions. All right,
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  so I'm going to close this out then. So I guess we're like what, Dave,
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  you're two, two and 0, Marie, you're one and one. Last one here. Okay.
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  Houston, I had to pick Texas because I'm from Texas.
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  So Houston has more than twice as many home sellers as home
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  buyers.
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  I had just listened to a podcast where they called out that
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  nationwide, apparently, and I though the number was staggering,
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  63% more home sellers than buyers, which I though was tremendously high.
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  So I'm assuming Houston with the number you provided sounds reasonable to me
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  compared to the national average. So I say true.
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  Okay. What do you think, Dave? Yeah, I heard something similar around that,
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  and I thought it was a,
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  a Texas was the area of the country with that highest
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  percentage. Is Houston, I mean, it's an attractive city.
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  I'll agree with Maria and say it is a headline.
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  All right. So two trues. And you guys finished it out strong. That is true.
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  So Dave, you're a three and 0. Maria, you're two and one. So well done.
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  Well done, Dave.
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  The Houston housing market, at least,
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  there's 131% more sellers than buyers.
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  And then if you want to look at a couple of others,
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  that also means that there's 2.3 sellers per buyer so roughly more than two to
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  one. Nashville was at 139%. Miami, 138%.
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  Austin, 115%. And Dallas, 108%. So all of that,
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  that means that all of those cities are seeing twice as many sellers as there
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  are buyers. And that's from that, that's actually from Redfin.
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  Interestingly enough though, Marie, you mentioned the national average. So
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  there are 1.53 million sellers to just about one million buyers.
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  So like that one and a half to one. So kind of interesting.
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  Certainly shows that there's volume out there,
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  but we're to some extent constrained by rates and by affordability. So, that
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  is Headline and Hallucination, lightning round. Awesome. All right.
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  All right, Dave, back to you. So on paper,
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  headline consumer spending looks remarkably solid.
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  Bank of America card data showed total per household spending rose just over
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  6% year over year in September. While Fiserv's spend trend,
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  same store sales accelerated to 7%.
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  But as you look beneath those headline figures,
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  a much more complex story unfolds.
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  Much of this top line expansion is being driven by higher prices rather than
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  larger shopping carts,
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  with average ticket prices growing 4% as one-year inflation expectations
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  climb to 3.9%. At the same time,
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  households are facing an uneven landscape of necessity costs from a projected
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  21% surge in winter heating oil expenses in the northeast to lingering
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  auto and property insurance rate pressures across urban and catastrophe prone
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  areas.
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  To help us break down where that consumer financial capacity really stands,
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  how different income groups are adapting,
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  and what this means for the upcoming holiday shopping season,
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  I've assembled this core team to answer those questions.
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  So kinda starting off with our first topic, and Maria,
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  maybe I'll toss this to you since you,
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  to start off with as you covered our credit trends. So, you know,
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  the our data showed year-to-date personal loan originations, you know,
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  surging about just over 26% year over year,
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  and HELOC utilization rose
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  6.6% while bank card utilizations actually kind of decreased almost
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  3% year over year. Are we starting to see... Now,
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  does this signal that consumers are,
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  are maybe shifting away from overuse on credit cards and maybe
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  clearing out, you know,
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  leveraging that home equity to pay down their debts to get ready for holidays?
• 14:05
  Or is this just the, the normal part of the business cycle? What do we think?
• 14:09
  As we've noted this before,
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  the bank card utilization being around 20.3.4%
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  since August of 2023. So it's been three years. And as you called out, Dave,
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  it's a natural progression to observe high utilization in normal circumstances,
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  let alone when households are squeezed you know,
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  for purchases,
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  even if they're more conservative views of how those would be approached.
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  But we are expecting that reliance on credit cards to
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  translate into a higher utilization.
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  We already observed that among younger populations that maybe have limited or
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  less access to credit. And we observe that for, of course,
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  among the subprime where the utilization instead of 20. 34
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  is up in the 70s.
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  So I'm expecting that , you know,
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  higher utilization rate in Bankard to increase during this
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  these next months. On the HELOC side, we've called this out as well,
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  that shadow risk of
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  HELOC has for some time as well been in the 40s,
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  low 40s across all risk score groups.
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  And the shift there has been the purpose
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  rather than home improvement shifting to other purpose,
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  including emergency funds and potentially relying on that for
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  holiday spending purchases. So that's another expectation there.
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  So Jesse, we were talking yesterday
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  around what was happening with the stock market
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  kind of the impact of the pullback, if you will, on, you know,
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  on, on AI stocks, and we saw the, you know, the 10-year kind of decrease.
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  You know, as, you know, we've
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  talked about the thriving population, you know,
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  wealth and assets benefiting from that explosive growth
• 16:10
  with AI stocks, as we see the market pull back a bit in the market,
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  you know, on those stocks, you know,
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  obviously that impact isn't going to be shared across the entire spectrum.
• 16:22
  Right. So, you know, as you're, as you're thinking about that,
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  and ties to, in regards to an overall consumer spend, I mean,
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  do you see this making, you know,
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  this hit to our portfolio impacting certain groups more than others and
• 16:37
  then how that might show up in spending? It's an interesting question. You know,
• 16:41
  when we look at,
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  and I've tracked a lot of metrics that I used to look that I still look at
• 16:47
  related to the Iran conflict, you know,
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  when we look at where the S&P 500 is compared to where it was before the
• 16:54
  conflict, we've seen 11, 12% return on the S&P. Certainly,
• 16:59
  that builds the wealth effect for consumers and, and for Americans,
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  most Americans, if they have some type of investment,
• 17:06
  whether it's in a 401 or a private investment.
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  And I think what we're seeing now is more of a maybe a shift away from a certain
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  asset class into another class.
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  So we're really not seeing that there's a decrease in the S&P where
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  where you would see potentially a fall of the overall market
• 17:28
  value. I do think, to answer your question, I do think that the wealth effect,
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  certainly we know it's a real thing. We see it in our data.
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  We know that the wealth effect will drive consumer behavior,
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  especially at the top end of the market.
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  We see the luxury goods that end up going out of
• 17:45
  go in or out of style based on how consumers react and how much money,
• 17:50
  how much disposable money they have. And so certainly,
• 17:53
  I think we're seeing kind of a rebalance,
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  maybe investors putting money into different investments, different vehicles,
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  and a little less AI,
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  maybe a little more traditional brick and mortar companies.
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  And so I feel a little better, at least right now as,
• 18:08
  in terms of what I've seen, that the spending overall has less,
• 18:13
  maybe less impact with this shift in portfolio asset.
• 18:18
  I think I'd be more worried if I started to see a broad decrease in, you know,
• 18:22
  any one specific metric, if it was you know,
• 18:25
  a consistent downturn in the S&P 500,
• 18:27
  if it was a consistent downturn in the the NASDAQ or any of the specific
• 18:32
  indices, maybe that would indicate we could see a hit to spending.
• 18:36
  But right now,
• 18:37
  I think it's more of the balance of where those where that wealth is going.
• 18:41
  And and so I think... And you brought up a good question related to you know,
• 18:46
  as part of your question related to yields, we've seen yields come back down,
• 18:51
  I think, largely as a result of that balance of trade. And so seeing,
• 18:55
  seeing more more focus on traditional assets,
• 18:59
  maybe less focus as much on AI, and that has kind of a rebalancing effect on,
• 19:04
  on yields as well. So we,
• 19:05
  we've partly seen yields come down as a result of that.
• 19:08
  And that then kind of plays out throughout the economy. In my opening,
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  I talked a little bit about some of the regional differences, you know,
• 19:14
  really in, around, let's say, like, you know, heating and natural gas, right?
• 19:18
  And so overall, the, you know,
• 19:21
  Energy Information Administration projects household heating and natural gas
• 19:25
  bills will actually drop 9% year over year. But obviously,
• 19:30
  depending on where you live, that changes, right?
• 19:32
  I mentioned Northeast Homes are going to see maybe a 21% surge
• 19:38
  in their six-month winter bills. You know,
• 19:41
  states like Rhode Island and Connecticut might exceed $1,500.
• 19:46
  You mentioned, Jesse, in our game, you know,
• 19:49
  the $1,000 a month car payment. So we're all spread out across,
• 19:55
  across the US. And so I'll start with Maria.
• 20:00
  Can you give us maybe some insights in terms of what's happening within your
• 20:03
  neck of the woods? And I'll, you know, I'll give you the freedom to say,
• 20:08
  you know, if you want to talk about insurance, you want to talk about housing,
• 20:11
  what, or job, whatever that looks like,
• 20:13
  but obviously we want to kinda keep it in the frame of how that might impact
• 20:17
  consumer spending in your region.
• 20:20
  Dave, I'm in Northern California,
• 20:21
  and of course here the high living expenses continue to squeeze consumer
• 20:26
  discretionary budgets. There are micro markets as well,
• 20:31
  particularly in San Francisco Bay Area,
• 20:33
  where upward pressure on housing costs are driven
• 20:39
  by major tech moves such as Anthropic's IPO, for example,
• 20:43
  that has driven up housing costs for prospective buyers.
• 20:47
  There's a second point, there's small business pressures.
• 20:51
  There's heavy regulation compliance costs.
• 20:55
  There's tax burdens that lead to shift
• 21:00
  capital to more business-friendly areas in the Sunbelt region.
• 21:06
  There's an impact,
• 21:07
  of course going back to the cautious credit habits that we keep discussing,
• 21:12
  and the prioritization of essentials due to tight disposable margins.
• 21:17
  I was looking at the regional differences on, you know,
• 21:21
  auto loan and banker delinquency, for example,
• 21:24
  that have stabilized here compared to national hotspots. And while,
• 21:28
  for example,
• 21:29
  we do observe auto delinquency being the
• 21:34
  lowest in the nation,
• 21:35
  it's 109 in September compared to 1.5 national average,
• 21:41
  it has also increased 150% year over year.
• 21:44
  So we have to keep in those yearly increases,
• 21:47
  which reflects some fragility in the region.
• 21:51
  And then the fourth component that I wanted to highlight is the ongoing
• 21:55
  employment volatility.
• 21:57
  We experience job growth in manufacturing and construction
• 22:02
  that I called out but not in the tech sector or the financial sectors.
• 22:07
  And this directly, of course, influences consumer confidence,
• 22:11
  and it shifts spending pattern towards more essential goods.
• 22:16
  And what we've been hearing we heard last week from our partner,
• 22:21
  Fiserv value-driven purchasing. So I think these are some of the
• 22:26
  regional highlights that I would like to call out for Northern California,
• 22:29
  San Francisco Bay Area. Jesse?
• 22:31
  I think in the South, what we're seeing is that spending is
• 22:37
  when we look at the tax receipts, or at least spending overall,
• 22:40
  we see spending numbers that maybe don't reflect exactly what's
• 22:45
  happening in the economy,
• 22:46
  and I think some of that has to do with big construction boom a lot of
• 22:51
  AI development,
• 22:52
  and some of those tax receipts then they sort of overshadow
• 22:57
  maybe overall the impact that it has on the consumer. So example would be,
• 23:02
  like, in Texas, we see 11.5% sales tax revenue for September,
• 23:07
  but the same retail trade tax receipts, you know,
• 23:10
  measuring more of a consumer look is 3%. So it shows that,
• 23:14
  that disconnect between the amount of investment that you're seeing with
• 23:20
  AI and potentially what you're seeing more on the spending side,
• 23:23
  just with restaurants and out to eat and and the different types
• 23:28
  of you know, goods and services that we buy.
• 23:32
  I think we're also seeing sort of as an experience of two different economies,
• 23:37
  and I think that's what we typically look at when we look at the market pulse
• 23:40
  index. So the idea that you see that thriver population, especially, you know,
• 23:45
  take Atlanta as a good example,
• 23:47
  the luxury retail is really strong still in Atlanta but we're seeing
• 23:52
  spending in other you know, other categories, restaurants for example,
• 23:57
  new vehicle sales, they're essentially flat or maybe declining. So, you know,
• 24:02
  you do see that divide that's still, still there. You mentioned energy costs,
• 24:06
  I think. That's one of the areas that's, I mean, certainly probably like you,
• 24:11
  I get about a, you know, probably a million political ads a day,
• 24:16
  and I think everybody's really harping on the idea of the impact that AI has on
• 24:21
  energy costs. You know,
• 24:23
  in the South we're seeing a pretty significant clip of,
• 24:27
  of increase of energy costs above and beyond.
• 24:31
  I think some of it has to do with the way that gas prices have increased,
• 24:36
  and so you have a lot more driving in places like Dallas or Houston.
• 24:40
  It's kind of that urban sprawl idea, but we also see there, you know,
• 24:43
  there can be some impacts of data center development and, you know,
• 24:47
  and other AI investments. So, you know, it's kind of hodgepodge, I guess,
• 24:52
  if you will. It seems like there are segments that are doing well.
• 24:55
  I think largely when we think of where the consumer is,
• 24:58
  especially in the South coming into the holiday season, they're not doing bad.
• 25:03
  They're not doing that bad, but that's not everybody, you know?
• 25:06
  So there are populations that are struggling,
• 25:08
  and certainly we see that with the Market Pulse Index. So, I do think, you know,
• 25:13
  we're poised at least to come into this spending season looking pretty good.
• 25:18
  But there are segments that I think are going to struggle,
• 25:21
  and I think you would, you know, see a different behavior as a result of,
• 25:24
  of that, you know, again,
• 25:25
  that bottom of the pivoting middle and this driver population.
• 25:29
  Dave, what are your observations for your region?
• 25:31
  So yeah, I'm in the suburbs of Chicago,
• 25:35
  and so I'll just briefly touch on, you know, kinda two things in my area.
• 25:40
  One,
• 25:41
  so last night Thursday the 22nd was the
• 25:46
  Thursday night football game between the Bears and the New England Patriots.
• 25:51
  Good one, by the way.
• 25:52
  The reason I'm bringing this up is StubHub ticket prices were between
• 25:57
  700 and $900. Oh, my gosh.
• 26:00
  With some prices hitting 14 to $1,800 depending
• 26:05
  on where those seats were at.
• 26:07
  The secondary market prices were between 590 and 971,
• 26:12
  makingd it the most expensive regular season game in Bears history. I'll,
• 26:17
  say the main reason was the Mike did contribute. So beloved coach,
• 26:22
  Mike Ditka, former Bears player let us do, you know, their own,
• 26:26
  led them to their only Super Bowl win passed away recently,
• 26:30
  and so they honored him last night. And so there was a rather large crowd.
• 26:35
  But much like what we saw with the World Cup this summer with
• 26:40
  high ticket prices, those stadiums were still packed. Yeah.
• 26:42
  So as both of you have pointed out,
• 26:45
  while we hear all these concerns, we're still, you know,
• 26:50
  stadiums are still being filled. Yeah. You know, basketball I was at, you know,
• 26:55
  I was at a Hawks game last week. Again, it was the first game.
• 26:58
  They're not doing, they weren't, aren't expected to do so good.
• 27:01
  It was pretty empty. That's what you might expect in a down economy. Yeah.
• 27:07
  Is more emptiness in seats.
• 27:10
  But the fact that it was almost sold out and those prices were that high
• 27:15
  you know, I would not say masks the population,
• 27:19
  but those who choose to go to sporting events and those who have the ability
• 27:24
  are still exercising that. Yeah. You know, it's those that maybe are not,
• 27:28
  where you're not seeing that.
• 27:29
  The second point I was going to make is around just kind of municipalities.
• 27:34
  Obviously elections are coming up in a couple of weeks.
• 27:39
  My community is voting on a referendum for a community
• 27:45
  fitness activity center. Mm.
• 27:49
  We're rather a small community. Is there, you know, the debates are,
• 27:53
  is there a need for it? But I mean, so you could have the, you know,
• 27:58
  the... I'm a Gen X, but, you know, and my kids are older,
• 28:01
  they're not going to use a lot of this stuff. I'm not sure if I, if we need it.
• 28:06
  And obviously, the baby boomers are, you know,
• 28:07
  you have enough of them complaining about taxes for schools, right? Yeah.
• 28:12
  So I think even, you know, not to be ageist, but I mean,
• 28:15
  in certain communities around some of those referendums,
• 28:18
  it's how much investment in tax revenue should there be for certain
• 28:23
  projects versus what you're going to get out of it. And that goes back to the,
• 28:28
  you know, the data centers and so on, you know, again,
• 28:31
  generating and cost versus you know, kind of opportunities. So,
• 28:37
  you know, my summary from what I heard from both of you is,
• 28:43
  on the whole, there might be positivity,
• 28:49
  but as you dig further down,
• 28:52
  there definitely are areas of concern for some,
• 28:56
  and then there are those who are, are still doing well. And so, you know,
• 29:01
  I'll leave that in kind of in
• 29:03
  my last point here as we kind of look to wrap up. As we're heading,
• 29:08
  going back to the holiday shopping, so this is more of an opinion,
• 29:11
  but we can kind of, if we have facts to kind of back it up, let's have at it.
• 29:17
  Is there really any hot item, toy,
• 29:22
  technology that's a must buy this holiday season that would make
• 29:26
  people jump out of their comfort zones to purchase? Jesse, I'll start with you.
• 29:31
  . I was hoping you wouldn't ask me because I'm so bad at that.
• 29:35
  I think I've
• 29:37
  never been a really dynamic gift giver. I do think, you know,
• 29:42
  there's still a, there's still a draw and there's always a draw to technology.
• 29:46
  So, you know,
• 29:47
  if it's the new iPhone or if it's a new TV or gaming,
• 29:52
  console system, I think those staples tend to always you know,
• 29:56
  they always kind of bubble up in the holiday season.
• 30:00
  I did want to get back to though,
• 30:03
  and I'll maybe take a guess after this,
• 30:06
  but I did want to get back to something Maria said and, and Dave,
• 30:08
  you mentioned as well.
• 30:09
  You know,
• 30:12
  maybe kind of building into what you asked is when you hear about
• 30:16
  consumer sentiment and when consumers are talking about their
• 30:21
  their personal situation and potentially like their,
• 30:24
  their lack of excitement around, you know, where their you know, where their
• 30:30
  situation stands,
• 30:31
  I think sentiment really reflects that psychology of where they are.
• 30:34
  How do they really feel? You know, do they really feel like they're constrained?
• 30:40
  But then there's this notion of when you look at the data and credit data
• 30:44
  specifically, you can see kind of where actual balance sheets stand.
• 30:48
  And so I think there's sort of a disconnect there,
• 30:50
  which to some extent I think helps to kind of explain the difference between
• 30:55
  what sentiment shows and what actually happens when you see continued spending.
• 31:00
  And so I think that's going to be kind of interesting and I think it probably
• 31:03
  hits on what you asked, which is if you open your wallet,
• 31:07
  you're going to open your wallet for something that's exciting.
• 31:09
  You know, what excites me that, that I can gift or that I can buy for myself.
• 31:14
  So I'd probably go for the new iPhone just because that one that holds out looks
• 31:19
  really cool. But, instead,
• 31:22
  I think I'm asking for a new book on on physics
• 31:28
  and hopefully a trip. So I'm kinda looking to, you know,
• 31:33
  to maybe relax on a beach somewhere with my new book.
• 31:36
  Jesse, I was laughing because you kept going and I was like, "Okay,
• 31:39
  what is the purchase?" You know,
• 31:41
  you're keeping us on edge and I knew you were going to go pick a phone.
• 31:44
  . I'm building it up, keeping it on edge for you. Yeah.
• 31:48
  And then the book with the trip, the experiences as we were ,
• 31:53
  that was a takeaway from last year as well, right?
• 31:56
  That shifting through the experiences that continues this year.
• 31:59
  I was looking at the poll results from last Market Plus webinar and
• 32:05
  restricting the purchases to essentials was the second most popular.
• 32:10
  Reliance on credit card, we should call out,
• 32:11
  but restricting purchases to essential was the second one.
• 32:15
  And I feel like that's how we're going about it. I'm seeing my daughter,
• 32:19
  she started working in July. She's needing to get you know, furniture.
• 32:24
  I had a coupon for 20%. She's still got, like, a very basic, you know,
• 32:29
  nightstand. And I was like, "Are you sure? You're getting 20.
• 32:31
  You want to..." So even a Gen Zer is being cautious in that sense on
• 32:36
  keeping it to the essentials,
• 32:37
  let alone in thinking maybe a longer term for the holiday shopping.
• 32:42
  In my household, we're not techies, so the phone, like, not a chance.
• 32:47
  I have you're going to laugh,
• 32:48
  but I have my personal phone is a 10X an XS phone.
• 32:53
  So, not worrying. It is tempting. It looks the two ,
• 32:58
  screens looks very tempting, but not.
• 33:01
  Maria, is that one, does that still have buttons on it? .
• 33:04
  Yes. Different cord to power, right?
• 33:06
  It has a pullout antenna. Yeah, there you go. Yeah. And a flip. .
• 33:12
  Well, remember the cultural upbringing. Latin American over here, we stick to,
• 33:16
  we don't buy what we cannot afford.
• 33:18
  We have that mentality because we're not as exposed to being able to use
• 33:23
  credit to think ahead, right? And,
• 33:26
  plan for these type of other goods.
• 33:29
  Not that we don't want to enjoy the games, as you were saying, Dave,
• 33:33
  going to the stadium and that type of experience versus maybe goods.
• 33:37
  I would say, I would lean more towards the experiences as well.
• 33:41
  That's a wise mentality to have, Maria. Yeah, so obviously, you know,
• 33:44
  as your kids age and you know, mine are, I have one left in college and,
• 33:47
  you know, they're working and obviously going back to that hot toy or hot thing,
• 33:51
  that doesn't matter to them, really. It's, again, it's, you know,
• 33:55
  do they need money to fly home you know, to visit us? Is it,
• 34:00
  do they need, you know, groceries? Do they need, you know, new furniture?
• 34:05
  You know, that's the kind of thing that, you know,
• 34:07
  my wife and I are looking at for them. In terms of, like, gifts for us, I've,
• 34:12
  you know, I tried to join Jesse's, you know,
• 34:17
  prime coffee machine club. ,
• 34:21
  bought my wife and I a new coffee machine.
• 34:23
  I'm not going to name the brand because we're not sponsored.
• 34:27
  But it makes cold brew,
• 34:28
  so that was the top selling point for me and as to why I got it.
• 34:34
  But yeah, I think, you know, kind of, you know, in closing with that
• 34:40
  yeah, hearing what the consumer says, hearing what businesses say,
• 34:44
  hearing what CEO's outlook is, and then looking at the data,
• 34:49
  right? I mean you know, as Maria pointed out when she summarized credit trends,
• 34:53
  we're a bit lagged. And so again,
• 34:54
  we don't have the insight to look back and see what some of the trends are.
• 34:59
  You know, our audience, as you're looking over your portfolios,
• 35:02
  can look at your data as well, but you have live data, right?
• 35:06
  So are you seeing utilizations creeping up?
• 35:08
  Are you seeing credit line increase request increasing?
• 35:13
  Those are your signals that, again,
• 35:15
  maybe there's going to be a positive holiday shopping season,
• 35:19
  or you've got some of your customers maybe in distress asking for some of this.
• 35:24
  So that's all the time we have for today.
• 35:28
  I definitely want to thank Maria and Jesse for joining me today. And to you,
• 35:32
  our listener, I hope you really enjoyed our topic and our game.
• 35:37
  Hopefully, you were as successful as I was.
• 35:39
  If you have any questions or suggestions for future podcasts,
• 35:42
  you can reach out to us at theadvisors@equifax.com.
• 35:46
  We look forward to hearing from you. Thank you.
• 35:48
  The information and opinions provided in this podcast are intended as general
• 35:52
  guidance only and are subject to change without notice.
• 35:55
  The views presented during the podcast are those of the presenter as of the date
• 35:59
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• 36:03
  Equifax.
• 36:05
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• 36:10
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