As Election Day brings anxiety, a Monarch survey reveals that millennials and Gen Z are cutting back on spending. Nearly a quarter are delaying major purchases. While the U.S. economy remains robust, heightened caution could slow growth. Economists advise CFOs to concentrate on controllable factors post-election, highlighting the importance of corporate earnings over market noise.
As Election Day unfolds, a palpable wave of anxiety sweeps through the American populace, particularly among younger generations. A recent survey by Monarch reveals that nearly half of millennials (48%) are tightening their belts on entertainment and dining due to the political climate, with 37% of Gen Zers following suit. Disturbingly, nearly a quarter of respondents are postponing significant purchases, such as homes and cars until after the election, showcasing a growing reticence to spend in an uncertain economy. While economic growth has been consistent, economist Gregory Daco suggests that increased caution from consumers could dampen this momentum. However, finance professor Peter Ricchiuti asserts that despite this caution, current economic conditions are some of the best seen in decades, marked by decreased inflation and strong market performance. Among the discussion of economic trends and consumer behavior, advice for CFOs in a post-election landscape echoes with clarity: “focus on what you can control.” Daco emphasizes the importance of a solid planning process and agile cash flow management in the face of unpredictable market volatility. Drawing lessons from the COVID-19 pandemic, Ricchiuti encourages CFOs to maintain clarity in operations, distinguishing the real influences on the stock market from mere noise, suggesting that corporate earnings truly dictate trends. As market dynamics fluctuate, the importance of fostering economic confidence within the middle class remains crucial, underpinning the overall health of the economy.
The article delves into the psychological impact of political events on consumer spending, particularly during elections, focusing on a survey of younger Americans. It connects these findings to broader economic indicators, highlighting the juxtaposition between a seemingly robust economy and consumer anxiety. The insights from economists Daco and Ricchiuti provide a framework for CFOs, emphasizing the need for adaptability and strategic control in uncertain times.
In summary, as the election casts a shadow of uncertainty over the economy, millennials and Gen Z exhibit a cautious spending attitude, with many delaying major investments. Economists suggest that while economic growth is strong, increased consumer caution could slow momentum. CFOs are urged to manage what they can control to navigate potential market fluctuations while fostering confidence in the middle class, who plays a crucial role in economic health.
Original Source: fortune.com
