U.S. consumer spending increased moderately in September, slowly regaining pace after witnessing the coronavirus-induced record plunge in March. The jump in consumer spending comes along with an increase in personal income, according to data released by the Bureau of Economic Analysis on Oct 30.
This once again proves that people are gradually showing faith in the economy. However, fears have once again started gripping the nation with a record jump in daily coronavirus cases, which may compel people to stockpile on necessities again.
Consumer Spending Increases in September
U.S. consumer spending rose 1.4% in September, after increasing 1% in August, the Commerce Department said on Oct 30. Consumer spending accounts for more than two-thirds of U.S. economic activity. Albeit moderate, September’s jump marks the fifth straight month of increase in consumer spending.
Data from the Bureau of Economic Analysis also showed that the rise in consumer spending in September coincided with a 0.9% increase in personal income after a 2.5% decline in August. However, despite five straight months of gain, consumer spending remains well below the level at the beginning of the year.
The jump in spending came on the back of consumers shelling out more on clothing, vehicles and footwear.
Coronavirus Fears Building Again
Although the United States witnessed its worst decline in the second quarter since 1947, the economy rebounded in the third quarter with the GDP jumping a historic 33.1%. This once again shows that people have not lost confidence in the economy’s strength, which is making them spend.
Consumer confidence hit a record low following the coronavirus outbreak as travel froze up and shutdown orders forced many restaurants, bars, entertainment venues and other retailers to close. However, consumer spending started improving since May, indicating that life is somewhat going back to normal with states lifting restrictions.
That said, record daily cases of coronavirus have once again ignited fears in the minds of people. Although consumer spending has increased, it is likely that people will focus more on buying essential commodities in the days to come as even if they are willing to spend on things like entertainment and travelling and holidaying, there aren’t too many options now.
Although the GDP rebounded in the third quarter and consumer spending increased for the fifth straight month, spending will remain restricted to essential consumer goods. So this is the ideal time to invest in these essential goods stocks.
Central Garden Pet Company ( CENT Quick Quote CENT - Free Report) is looking forward to strengthening its position as one of the leading companies in the U.S. pet supplies, and lawn and garden supply spaces. Unique packaging, point-of-sale displays, logistic capabilities and a high level of customer service are some of its key growth catalysts.
The company’s expected earnings growth rate for the current year is 23.1%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days. Central Garden Pet Companyhas a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Spectrum Brands Holdings Inc. ( SPB Quick Quote SPB - Free Report) offers a portfolio of leading brands in several product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, and lawn, garden and home pest control products and repellents.
The company’s expected earnings growth rate for the current year is 26.2%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. Spectrum Brands has a Zacks Rank #2.
Lifetime Brands, Inc. ( LCUT Quick Quote LCUT - Free Report) is a leading designer, marketer and distributor of kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories.
The company’s expected earnings growth rate for the current year is 53.3%. Lifetime Brands’ shares have gained 6.3% in the past 30 days. The company carries a Zacks Rank #2.
Grocery Outlet Holding Corp. ( GO Quick Quote GO - Free Report) is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products that are sold through a network of independently owned and operated stores.
The company’s expected earnings growth rate for the current year is 54.4%. Its shares have advanced 12% over the past month. Grocery Outlet has a Zacks Rank #2.
WD40 Company ( WDFC Quick Quote WDFC - Free Report) offers multi-purpose maintenance products, including aerosol sprays, non-aerosol trigger sprays, and liquid forms under the WD-40 Multi-Use brand for various consumer uses and specialty maintenance products.
The company’s expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 3% over the past 60 days. WD40 Company carries a Zacks Rank #2.
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