July 25, 2024 | July 25, 2024 | OUR BEST INTEL Good afternoon,  We have three new items from our economists today:  1. A massive new report on the state of the U.S. economy 2. A memo dissecting consumer spending this summer 3. An introduction to our newest proprietary economic indicator Additionally, our latest 2024 election tracking just published. The State of the U.S. Economy Report Despite this morning’s positive economic news, Morning Consult’s data finds mounting evidence that the backbone of economic growth—consumer demand—is poised for further softening over the second half of 2024. Following several years of volatility brought on by the pandemic, stimulus, historically high inflation and a rapid rise in interest rates, the U.S. economy is shifting into neutral by many measures. The labor market is cooling, price pressures are dissipating, and U.S. consumers' willingness to splurge is looking increasingly tapped out. One important driver here: inflation is cooling, but leaving a lasting mark. The annual inflation rate continues to trend toward the Federal Reserve's 2% target, and U.S. adults are no longer reporting as much surprise over high prices. However, the memory of elevated price growth looms large in the consumer mindset: Inflation expectations for a year from now have recently risen, despite little evidence of mounting price pressures. Price Surprise index Indirect Consumer Inflation Expectations over the 3-month moving average next 12 months ——I|CIE ——4-week moving average 0 8% 5 7% Jul. 13, 24 210 6% Jun. ‘24 -15 5% -20 4% -25 3% -30 2% Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun 22 '22 22 22 '23 23 '23 '23 '23 '23 '24 '24 24 22 '22 22 22 23 23 23 23 23 23 24 24 24 Sources: Morning Consult Economic Intelligence Sources: Morning Consult, Cleveland Fed Download the full 38 page report, which includes details on: * How the labor market has been supporting consumer finances, and implications of rising employment levels * Recent developments concerning income, savings and debt among U.S. households * Impacts of cooling inflation on consumers and expectations for price pressures going forward * Consumer sentiment and spending trends so far in 2024, and a consumer demand outlook for the remainder of the year Last summer’s boost in consumer spending hasn’t materialized in 2024 2023 was a year of incredible strength for consumer spending, above and beyond many expectations. Strength in spending was driven in large part by discretionary categories, or goods and services that can be categorized as “non essential” including airfare, hotels, concert/sporting events, and more. So far in 2024, however, last year’s boost has not materialized. Instead, average spending has been relatively subdued since the summer season began, with discretionary services purchases declining year-over-year. Often when household finances are tight, nonessential spending is the first to be cut from budgets, one of many signs that the U.S. economy is cooling from overheated to neutral. Read the full analysis, which includes category-level spending data by demographic  Introducing Morning Consult’s Consumer Health Index Morning Consult is unveiling a new Consumer Health Index, which relies on our high frequency economic data to monitor near-term trends in consumer demand. The index combines a predictive measure of consumers’ ability to afford purchases (lagged changes in unemployment) with a real-time indicator of consumers’ willingness to spend (the index of current personal financial conditions, a component of the index of consumer sentiment) to estimate consumers’ overall demand. Learn more here JUST PUBLISHED Harris leads Trump, notches higher support than Biden has ever received In our first survey conducted fully after President Joe Biden announced he will no longer seek re-election, Vice President Kamala Harris leads former President Donald Trump, 46% to 45%. Her level of support at the start of her campaign exceeds the highest level of support we gauged for Biden since tracking began in late 2022, with fewer voters now indicating they’ll vote third party. Read the full update to the 2024 election tracker ICYMI Tracking the Approval Ratings of All 50 U.S. Governors: Republican Phil Scott of Vermont, a former NASCAR driver, is the country’s most popular governor for the second year running with an astounding 81% approval rating at home. His re-election in November looks to be formality. Tracking the Approval Ratings of All 100 U.S. Senators: For the fifth quarter in a row, Republican John Barrasso of Wyoming is America’s most popular senator, with a 71% approval rating among Cowboy State voters, Is a Beauty Bubble on the Horizon? New Morning Consult data shows that Gen Z consumers are becoming disillusioned with the beauty industry as pressures to engage in increasingly intense regimens mount Webinar On-Demand: State of U.S. Elections in July 2024: An alarming debate performance, an assassination attempt, the Republican National Convention and a last-minute changeup at the top of the ticket: The first half of the summer featured a tumultuous few weeks in American politics. In this webinar, recorded on July 23, 2024 at 12 p.m. ET,  Morning Consult analysts Jason McMann, Cameron Easley and Eli Yokley break down the state of the race. Harris Is Uniting and Energizing Democratic Voters — and Polling Better Against Trump: A Morning Consult survey conducted after President Joe Biden ended his re-election campaign found that 65% of Democratic voters support Harris to lead the party’s ticket, more than double the level of support she had in a hypothetical look at the same question late last month following the first presidential debate. Why It Might Be Time to Cut Interest Rates: There are now multiple signals pointing to interest rates becoming prohibitively restrictive: consumers reporting pullbacks due to higher rates, a loosening labor market, muted GDP, among other signals, all while inflation has cooled nearly all the way to the Fed’s target level.  First and Business Class Fliers are Increasingly High Earners: While business and first class fliers were previously more evenly spread among income groups, they’re now increasingly likely to be high earners, as premium economy fares attract middle- and lower-income travelers. State of the Parties 2024: RNC Edition: State of the Parties is an annual feature dating back to 2016 that examines Americans’ attitudes on the Democratic and Republican parties. This report, which focuses on the Republican Party, is the first of two editions Morning Consult will release this year during each national nominating convention. Global Corporate Purpose Tracker: We're following consumers’ expectations surrounding corporate activism and gauging global trust in business, while diving deeper into the expectations of global consumers around corporate action on key social issues. There’s a Market for ‘Dumb’ Technology — And It’s Made Up of Young People: New Morning Consult data shows Gen Z adults and millennials’ interest in acquiring devices without advanced features greatly outpaces that of older generations, largely driven by negative feelings toward their current levels of screen time Parents Preparing for Back-to-School Shopping Have Historically High Budgets: It’s only July, but back-to-school shopping is in full swing: 40% of parents said they’ve started shopping for the new school year at the beginning of this month From Hipster to Hip Pain: Millennials Are Officially Getting Old: Millennials’ desire for routine translates to brand loyalty — the share who say they’ll stick with a product or service they like is up 7 percentage points. Upcoming Webinars July 30 Luxury Consumers 101 We're going deep on luxury consumers — their demographics, media habits, psychographics, spending, financial outlook and more. REGISTER. Aug 15 The State of the 2024 U.S. Elections: August 2024 After a tumultuous July, we'll take another pulse check on the presidential election and how the new Democratic nominee is fairing against Donald Trump. REGISTER. U.S. Enthusiasm for 4-Day Workweek Dips Without Remote Work Option Brands analyst Ellyn Briggs unpacks employed U.S. adults’ sentiment toward the burgeoning work trend, including how remote work policies impact support for it e, MBI By Cameron Easley KEY TAKEAWAYS - American workers are extremely optimistic about the practice: 87% of employed U.S. adults said they would be very or somewhat interested in a four-day workweek, and a nearly equal share (82%) said they think the widespread adoption of it in the United States would be successful. However, remote work policies may impact the four-day workweek's appeal. While 75% of employed US. adults reported being interested in the truncated approach if remote work was allowed “all or nearly all of the time.” this figure dropped 1o 51% when respondents were presented with the option of “no remote work at all.” More broadly, employed U.S. adults are showing signs of interest in lower impact lifestyles. The survey also asked whether American companies should adopt certain work norms seen in Europe, and large majorities of employed U.S. adults responded in favor of every tested policy — though support was strongest for extended vacation periods and lunch breaks. Data Downloads Pro+ subscribers are able to download the datasets that underpin Morning Consult Pro's reports and analysis. Contact us to get access. Data file | Pro+ A sortable XLSX file of survey results among U.S. adults and key demograpt About Pro+ Abrief outline of what datasets are included in Morning Consult Pro Morning Consult data paired with expert analysis Morning Consult pro subscribers get full access to all of the data and analysis in Our Best Intel, along with in-depth special reports, daily analysis and trend tracking dashboards on how consumers are spending, streaming, shopping, voting and engaging. START A FREE TRIAL Morning Consult data paired with expert analysis Morning Consult pro subscribers get full access to all of the data and analysis in Our Best Intel, along with in-depth special reports, daily analysis and trend tracking dashboards on how consumers are spending, streaming, shopping, voting and engaging. 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