The American Consumer - Four Charts for the Fourth of July Cetera Investment Management LLC
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The American Consumer Four Charts for the Fourth of July Cetera® Investment Management LLC
CETERA INVESTMENT MANAGEMENT // THE AMERICAN CONSUMER 2
Famous Births
Happy birthday, and Deaths
America!
Calvin Coolidge was the only
president born on Independence
Day (July 4, 1872).
Declaration of Independence
authors and former presidents John
Adams and Thomas Jefferson died
Coming from humble beginnings, with a few bumps
within hours of each other on July
in the road (like in 1814 when the British Army set the 4, 1826—the fiftieth anniversary of
White House on fire), America hit its stride to become the Declaration of Independence.
the economic superpower it is today. The U.S. economy Five years later, former president
is now $21 trillion in size, and 11 of the 15 most valuable and founding father James Monroe
global brands call the amber waves of grain home.1 passed away on July 4, 1831.
According to the National Retail Federation, $6.8 billion
is expected to be spent this July 4 on food alone! To
consume it, and otherwise celebrate the festivities, more
Celebrate Good Times
than 41 million Americans will travel more than 50 miles The Fourth of July has been a
federal holiday since 1870, but
by car and roughly 4 million by plane.2 That trip to the gas
wasn’t a paid holiday for federal
station adds fuel to the car AND the economy overall. workers until 1941.
For this year’s Fourth of July, we’re taking a journey—to
the auto dealership, gas station, couch, and to Coney
Island—to examine the American consumer. Buckle up
Fire Up The Grill
and enjoy the ride! Hot dogs were invented in
Frankfurt, Germany in 1487, five
years before Christopher Columbus
landed in America. 3
Americans were introduced to
hot dogs, known at the time as a
dachshund sausage, in a bun at
the 1893 Colombian Exposition
in Chicago. That same year,
dachshund sausages became a
fixture at baseball stadiums, starting
the age-old debacle of finding the
right time to visit the concession
stand and not miss any of the action.
CETERA INVESTMENT MANAGEMENT // THE AMERICAN CONSUMER 3
Auto Sales
Car lots are usually busy the week of the Fourth with consumers looking for a deal, and this year should be no different.
There is still strong consumer demand for new cars 10 years into this economic expansion, even with the average new vehicle
transaction price of $36,843.4 Why?
Consumer sentiment is currently elevated.
Wage growth is at a healthy level.
The labor market is still in good shape.
Auto sales are a good proxy of American consumer health: they drop when the economy softens and rise when it strengthens.
Auto sales growth has leveled off over the last few years, but overall sales remain strong [Figure 1].
Figure 1: U.S. Auto Sales
U.S. Auto Sales
18.0
16.0
Millions of Units
14.0
12.0
10.0
8.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Auto Sales 6-Mont h Av erage
Source: Cetera Investment Management, Federal
Reserve Bank of St. Louis, U.S. Bureau of Economic
Analysis. Monthly auto sales data is the seasonally
adjusted annual rate. Data as of 5/31/2019.
CETERA INVESTMENT MANAGEMENT // THE AMERICAN CONSUMER 4
Gasoline Prices
Now to fill up the tank! The average retail gas price nationally is $2.62, which is lower than this time last year. We anticipate
reasonable prices for this year—great news for those 41 million Americans heading out on a road trip. Gas prices have trended
higher since bottoming out in 2016, but they remain well below the nose-bleed prices of 2011 to 2014, when oil climbed over
$100 per barrel [Figure 2]. Low to moderate gas prices can provide a boost to consumer spending: when you pay less at the
pump, there’s more to spend on the essentials, like fireworks and barbecue supplies.
Figure 2: U.S. Retail Gas Prices
U.S. Retail Gas Prices
4.0
3.5
Dollars Per Gallon
3.0
2.5
2.0
1.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Cetera Investment Management,
YCharts, Energy Information Administration.
Data as of 6/17/2019.
CETERA INVESTMENT MANAGEMENT // THE AMERICAN CONSUMER 5
E-Commerce Sales
In our digital age, no holiday is complete without online sales. More shoppers are leaving their car in the garage and filling
their carts from the comfort of home. E-commerce sales accounted for less than 1 percent of total retail sales in 1999. Twenty
years later, they now top 10 percent [Figure 3]. As retailers place more emphasis on their online business, that trend is likely to
accelerate. So, save yourself the gas and order those party decorations with just a few clicks.
Figure 3: E-Commerce Retail Sales as a Percent of Total Sales
E-Commerce Retail Sales as a Percent of Total
Sales
10.0
8.0
Percent
6.0
4.0
2.0
0.0
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: Cetera Investment Management, Federal Reserve Bank
of St. Louis, U.S. Census Bureau. Data as of 3/31/2019.
CETERA INVESTMENT MANAGEMENT // THE AMERICAN CONSUMER 6
Hot Dogs
Is there anything Americans consume more of on July 4 than hot dogs? Probably not. The National Hot Dog and Sausage
Council notes 150 million hot dogs are eaten on Independence Day.5 Perhaps the best-known example of this is the
Nathan’s® Famous International Hot Dog Eating Contest, held annually on Coney Island, where the number of hot dogs
eaten (buns included) by the winner has over time grown to an astounding 74 in 10 minutes [Figure 4]. Hot diggity dog!
Figure 4: Nathan’s® Famous International Hot Dog Eating Contest Winning Total
Nathan's Hot Dog Eating Contest Winning Total
80
70
60
50
# of Hot Dogs
40
30
20
10
0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: Cetera Investment Management, Wikipedia.
July 4 is a celebration of our country and a great
opportunity to examine consumer behavior. From
all of us at Cetera Investment Management, we wish
you a happy, safe (and dare we say hot dog-filled?)
Independence Day!1 https://www.usatoday.com/story/money/business/2018/10/09/most-valuable-brands-apple-google-amazon/38061893/ 2 https://newsroom.aaa.com/tag/independence-day-travel-forecast/ 3 https://www.hot-dog.org/culture/hot-dog-history 4 https://www.prnewswire.com/news-releases/average-new-car-prices-up-2-percent-year-over-year-for-april-2019-according-to-kelley-blue-book-300841489.html 5 http://www.hot-dog.org/media/consumption-stats About Cetera® Investment Management Cetera Investment Management LLC is an SEC registered investment adviser owned by Cetera Financial Group®. Cetera Investment Management provides market perspectives, portfolio guidance and other investment advice to its affiliated broker-dealers, dually registered broker-dealers and registered investment advisers. About Cetera Financial Group® Cetera Financial Group (“Cetera”) is a leading network of independent firms empowering the delivery of professional financial advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions. Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions. Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations. Advisor support resources offered through Cetera include award-winning wealth management and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology. For more information, visit cetera.com. “Cetera Financial Group” refers to the network of independent retail firms encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Investment Services (marketed as Cetera Financial Institutions), Cetera Financial Specialists, First Allied Securities, and Summit Brokerage Services. All firms are members FINRA/SIPC. Disclosures The material contained in this document was authored by and is the property of Cetera Investment Management LLC. Cetera Investment Management provides investment management and advisory services to a number of programs sponsored by affiliated and non-affiliated registered investment advisers. Your registered representative or investment adviser representative is not registered with Cetera Investment Management and did not take part in the creation of this material. He or she may not be able to offer Cetera Investment Management portfolio management services. Nothing in this presentation should be construed as offering or disseminating specific investment, tax, or legal advice to any individual without the benefit of direct and specific consultation with an investment adviser representative authorized to offer Cetera Investment Management services. Information contained herein shall not constitute an offer or a solicitation of any services. Past performance is not a guarantee of future results. For more information about Cetera Investment Management, please reference the Cetera Investment Management LLC Form ADV disclosure brochure and the disclosure brochure for the registered investment adviser your adviser is registered with. Please consult with your adviser for his or her specific firm registrations and programs available. No independent analysis has been performed and the material should not be construed as investment advice. Investment decisions should not be based on this material since the information contained here is a singular update, and prudent investment decisions require the analysis of a much broader collection of facts and context. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The opinions expressed are as of the date published and may change without notice. Any forward-looking statements are based on assumptions, may not materialize, and are subject to revision. All economic and performance information is historical and not indicative of future results. The market indices discussed are not actively managed. Investors cannot directly invest in unmanaged indices. Please consult your financial advisor for more information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability, and differences in accounting standards.
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