CITI: 10 Reasons Why We're Worried About The US Consumer

Photo: Flickr via heatherbuckley

Citi’s retailing analyst Deborah Weinswig just published a new research note titled Empty Pockets Update.”Empty Pockets envisions a slowdown in consumer spending for the remainder of the year,” explains Weinswig.  “We see a shift towards more discerning and frugal purchasing behaviour by consumers, with the biggest delta in spending patterns coming from high-income consumers (due to the negative wealth effect) and a smaller delta from low-income consumers (who remain strapped).”

Having said that, she lists 10 reasons why she is cautious on the consumer:

1) Leading macro indicators point down; 2) unemployment ticks up; 3) consumer confidence moves lower; 4) falling markets create negative wealth effect; 5) home prices remain pressured; 6) consumer balance sheet is shaky; 7) economic weakness abroad; 8) uncertainty surrounds the U.S. presidential election; 9) Broadlines SSS have slowed; and 10) growing retail inventories point to cautious spending.

In this environment, Weinswig recommends own shares of Dollar General (DG), Kroger (KR), and Walmart (WMT).

SEE ALSO: Credit Suisse Presents The 25 Best Stocks In America >

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.