May 31

5/31 – Following 2 years of stimulus-fueled spending, consumers are running on empty as savings dry up and inflation takes its toll. Compared to a year ago crude oil is $115.07 per barrel vs $66.85, the AAA national average for gasoline is $4.62 per gallon vs $3.04, and natural gas is $8.73/M btu’s vs. $2.96, which will increase the cost of air conditioning this summer. On Friday, the University of Michigan said consumer confidence hit a 10-year low in May. A recent survey by the NPD Group showed over 80% of Americans plan to cut back spending – but when? There have been hints of a pull-back in demand for durable goods - and maybe even in this spring’s flat beef market. But so far consumer spending – supported by strong employment - has held up, posting a 4th straight monthly gain of +0.9% in April. The labor market might be our best indicator. If/when it cools, there could be hell to pay.