SUPPORT: Tuesday’s Valentine’s Day is the next test for the still-resilient US consumer. A lot hangs on it. It’s a top-5 spending event of the year, consumption is near 70% of the economy, and Q1 estimates are for a robust 2.2% GDP growth. Surveys show romantics are set to spend 10% more than last year. This is helped by very low unemployment and excess household savings still seen at over $1.5 trillion, equivalent to a chunky 6.5% of GDP. Our ‘Valentines Index’ of related commodity prices gives further good news. These prices have lagged behind both the broader commodity rally and inflation. This is some rare good news for consumers. And a reminder not all commodities have participated in the energy-led rally of the past two years.
VALENTINES: US romantics are forecast to spend a combined $26 billion, or $193 each, on Tuesday’s February 14th Valentine’s Day. This would be an inflation busting 10% increase versus last year. This makes it one of the largest shopping events of the year, behind only back-to-college and -school ($1,199 and $864 respectively), Christmas ($832) and Mother’s Day ($245). The most bought Valentine’s gifts are candy (57%), greeting cards (40%), flowers (37%), an evening out (32%), and jewellery (21%). ‘Experiences’ are also surging as gifts.
COMMODITIES: Our ‘Valentine’s Day’ index is made of six equal-weighted commodity prices that are used in the most popular Valentines Day expenditures. Cocoa and sugar ‘candy’ prices, beef and chicken ‘dinner/evening out’ prices, and gold and silver ‘jewellery’ prices. The index has risen 10% since the inflation shock started two years ago. This has significantly lagged the broader energy-led commodities surge, up 30%, and the accumulated 13% rise in US inflation.
All data, figures & charts are valid as of 09/02/2023