Consumer Industry Report - Q4 2024

Report Highlights

Elements Affecting Consumer Industry Dynamics and Outlook in Q4 2024 and Beyond

• The Federal Reserve's recent interest rate cuts, including a 25 basis point reduction in November 2024, aimed to stimulate economic activity.  
• Inflation rose to 2.7% in November, slightly up from 2.6% in October, indicating persistent inflationary pressures. These economic factors have had a mixed impact on consumer spending across the consumer segments.
  • • Lower borrowing costs drive auto loans, boosting EV and hybrid sales, supported by government incentives and rising environmental awareness.
    • Modest discretionary spending growth during sales events is driven by e-commerce, though inflation increases price sensitivity and discount demand.
    • Essentials maintain demand, but inflation drives consumers toward bulk purchases and private-label alternatives.
• Labor shortages and supply chain disruptions continue to pose challenges. Companies are investing in automation and diversifying supply chains to mitigate these issues.
• The acceleration of digitalization has transformed retail and consumer services. E-commerce platforms leverage AI for personalized shopping, while consumer services adopt digital tools to enhance engagement.

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