Leading Indicators: Bumpy Holiday Season for Consumers, and Maybe B2B Too?

This week, PYMNTS Intelligence noted the appeal of paying over time — especially now, headed into the holiday shopping season, which starts, well, now.

Our data show that 43% of consumers say pay later availability — on cards and also through buy now, pay later (BNPL) options — for holiday purchases influences where they plan to shop.  The general appeal of budgeting, of managing cash flow point to the fact that consumers are keeping their finances top of mind as Thanksgiving, Black Friday and the year-end holidays speed toward us.

Target said this week that consumer budgets are “stretched,” as management noted on latest earnings conference call with analysts.

And a spate of economic data, parsed this week by PYMNTS, indicate there may be some bumpiness at the register, and perhaps across a few supply chains, too, at least in terms of the manufacturing sector — not in terms of logistics but in terms of demand for larger-ticket items they make.

Leading Economic Index: Some Volatility Ahead?

The Conference Board Leading Economic Index (LEI) continued to decline in October, off 0.4% after falling 0.3% in September. The overall decline, as PYMNTS has noted, has been 2.2% through the past six months.

The Index is not signaling a recession, but The Conference Board has detailed that the “largest negative contributor” to performance last month was from manufacturers’ new orders, and weakness was seen across 11 of 14 industries tracked.

“Apart from possible temporary impacts of hurricanes, the US LEI continued to suggest challenges to economic activity ahead,” the Board noted. As for consumer intentions, as PYMNTS reported, with a nod toward The Conference Board’s survey of spending intentions, consumer buying plans for big-ticket appliances were mixed and buying plans for electronics were slightly down.

For manufacturers, volatility in orders and supply chain dynamics may spur them to examine cash flow — and access to capital which can help gird against slowdowns or meet unanticipated demand. PYMNTS Intelligence, in the 2024-2025 Growth Corporates Working Capital Index, commissioned by Visa, found that manufacturing and construction firms have relied heavily on external working capital, with 98% of companies using at least one working capital solution and one-third using two or more.

Even more recently, in a sign that holiday shopping may show some volatility of its own, on Friday (Nov. 22), the University of Michigan’s final November index on consumer sentiment, at 71.8, was a bit lower than the initial 73 reading. And inflation expectations were mixed: year ahead expectations of inflation were 2.6%, down from 2.7%. But longer term expectations bumped up, to 3.2% through a “long run” horizon (five years), ahead of previous estimates from 3% as measured last month. That’s the highest longer term projection in a year, per the data.

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