Low-Income Consumers Pulling Back On Restaurant Spending May Signal Trouble Ahead

There's been no shortage of alarming headlines as the fall season has unfolded - from the collapse of Tricolor and First Brands' bankruptcy to the regional bank credit crunch (unrelated to Tricolor and First Brands). Adding to the concern, UBS warned earlier this month that "lower-income consumer weakness is spreading to at least middle-income consumers." Put this all together, and Mr. Powell might want to queue up more 25bps interest rate cuts (market prices in 2 25bps by EOY). 

With the holiday shopping season officially beginning on Black Friday, Nov. 28 - about 39 days from Monday - a new Goldman note citing HundredX data and a Consumer Survey provides yet another snapshot of the consumer, showing similar troubling behavior patterns observed previously.