US Consumer/Manufacturing: Signs of relief + potential for an inventory re-build cycle

The bi-furcated US consumer with the lower income cohorts suffering and higher income cohorts propping up consumption remains the big picture context. However, there has been some notable improvements shifts in the underlying data.

Lending standards are easing for consumer loans, which leads delinquency rates and suggests we are past peak delinquencies. Retail sales for more discretionary items like furniture, electronics, and clothing are also starting to grow again after a prolonged period of stagnation in 2023-24.

Wholesale durable goods sales are starting to accelerate, while inventories growth remains muted. This is something that is typically seen coming out of downturns.

The ISM manufacturing survey also continues to report low and falling customer inventories, which bodes well for future customer orders.