Money is getting tighter for working class consumers, says Ariel's Charles Bobrinskoy
Charlie, in some ways this goes back to the conversation we were just having about the consumer and arguably the fact that we are seeing this increasing bifurcation in the consumer. The fact that the lower end consumer, even some of the middle class does seem to be getting a little more strained and and you’re seeing softness there. But the higher end consumer, which arguably is what Sweet Greens is, is targeting very similarly to say a Chipotle which put up strong numbers recently too. How does that carry weight for the broader? Bucket of this part of the economy, yeah. So I think the way to think about this is for the affluent, the money supply doesn’t really matter much. How much money you have in your pocket, how much you have in your checking account is not how wealthy you feel if you are a wealthy person. But if you are a middle class or a working class, you very much care about how much cash you have in the bank in your pocket. And that’s what M2 measures from the Fed. And what that is showing is that the money supply after booming higher during COVID is actually coming down. For the first time in history over the last year, we’ve never had a decrease in the money supply. We had one in the last year again up from a big increase during Covad. So I think things are getting tighter. That doesn’t affect millionaires and and billionaires, but it does affect the person who the working class and that is what we’re seeing in companies that are exposed to that more middle market consumer. So that is again why, why I’m changing my tune a little bit about the strength of the economy the the middle class working consumer is no longer as flush. As they were as recently as three months ago.