Data shows consumers are starting to worry about job losses: Jharonne Martis

So I referenced the retail sales report this morning, which was which was a big miss, but the most eye popping part of this were revisions. I mean, think about this folks. These economic reports come out all the time. When they come out, narratives are created. Analysts say certain things, right? Everyone feels good based on that data. And then later on the data changes often and profound and dramatic ways and the narrative never changes. So it's so crazy. Well, my next guest has really, I think the best consumer research on the street. And recently her firm updated its own consumer sentiment index. I want to bring it now LSEG Director of Consumer Research, Jerome Martinez. And 1st, let's go over these these revisions because last month, original headline was unchanged, down to 2/10. I saw that was down 110th, down 3/10, Control group down 3/10, down 5/10. So you know, when the retail sales number came out a month ago, everyone's like it's still pretty good. It's hanging in there. It's pretty strong, but it wasn't in real life. It really wasn't. How did I mean, it doesn't seem to affect markets, but it is weird though it is and it might not be the end of it. Our LSAC data suggests that earnings, consumer spending in general is projected to continue to slow down into the second quarter. This is just the beginning of it. But your, your consumer sentiment number didn't drop that much month over month, right? I mean, it didn't, but the biggest concern year over year, right? But the biggest concern within the consumer sentiment is that consumers are starting to show the first worries around the current and future drop losses. So if the unemployment number continues to go upwards above that 4% mark, then we're going to see some trouble with the economy. Well, in that case, I mean, the New York Fed unemployment, the New York Fed consumer report, last one I think is like last week, the expectations for unemployment, particularly for lower income folks is through the roof, right? So people are all a lot of people already bracing for to lose their job. Absolutely. That's the biggest concern. That's that's that this is the first time we saw that big of a, of a difference because of the worries in current and future job security. Now, if that's the unemployment number is the one economic indicator consumers understand very, very well. And if they believe and they start seeing more of their friends and family lose their jobs, they're going to put their hands in their pockets and hold back on spending. Right. I want to just go over this number with you because, you know, listen, we saw so non non store retail Internet up eight tenths. Finally, food services went down. Although I want to ask you about that cause restaurants, you were pounding the table at one point over restaurants. The sporting goods. Sporting goods was looked pretty strong. So I'm thinking, OK, Amazon Dicks, you know, but all these other things, home furnishing continues to be a disaster down month over month, year over year. Building materials now month over month, year over year. There's some unmitigated disasters on here. Well, they're suffering because of the pullback demand from the pandemic. And then the sporting goods, they did very well in the first quarter and that's still projected to continue to do well in the second-half because of the Olympics. When the Olympics happen, we always see, oh, everyone goes out budget tennis rack. Exactly. And then you're gonna see the the Internet numbers reflected in our earnings number in a little bit. Does this say soft landing to you? Ooh, you know, our projections for LSX suggest that consumer spending will slow down even further. OK, so maybe not a soft landing from that perspective, right? Let's look at your your growth. These are these are your projections, your first of all, what is broad line retail? Because that's a right. So I want to point out though that Q2 earnings are expected to only grow 6.6%. That is a significant drop from last quarters 23%. Just so you know that that define that underlines the under the slowdown in consumer spending broadline. The three biggest winners here are for convenience and value, and that's Amazon, eBay, an Ollie bargain. So that's where the consumers are gravitating, right? Value wins. Discretionary spending looks like it's fading and negative on restaurants and hotels. That was number one for a long time. I got less than a minute to go, in fact, 30 seconds. OK. So I want to give you some props if you don't mind, OK? Because only a couple of months ago, I think it was a a May, April, May, you were here, you gave these stocks up 37 percent on Gap, 59% on the Abercrombie and Fence, 13% of raw stores, 33% of Lulu, which is one of the worst performers. So you called the bottom there. You hanging in with these things? It's your folks. If you're long these Full disclosure, I just sent an alert to my subscribers to take profits on Abercrombie. I I blink. Yeah. So the Gap and Amazon are the most likely to beat earnings estimates and post a positive surprise in Q2. Amber Combi were saying that analysts are raising their earnings estimates for that. So and it has positive price momentum in its favor. Now again, we talked about value wins. So off price retailers are projected to do the really good for back to school and then at leisure sporting goods will continue to benefit Lulu. Alright, So hang in there, hang in there, alright, great stuff. Always great to see you, you too. Absolutely.