Zeta Economic Index (ZEI) Indicates Resilient Yet Cautious US Consumer

Rhea-AI Summary

The Zeta Economic Index (ZEI) for August 2024, released by Zeta Global (NYSE: ZETA), shows modest growth in the US economy despite challenges. The Economic Index Score increased by 0.6 to 67.4, indicating robust economic activity. The Economic Stability Index rose by 0.3 to 66.1, suggesting consumers can manage short-term financial disruptions.

Key findings include:

• 15% year-over-year increase in discretionary spending
• 10% month-over-month decline in the New Mover Index
• 4.6% drop in Job Market Sentiment Index compared to last year
• 4.1 point increase in the Automotive Index since July
• 12.6 point decrease in the Retail Index month-over-month
• Travel sector tracking 7.5 points above 2023 values despite slowdown

Positive

• Economic Index Score increased by 0.6 to 67.4, indicating robust economic activity
• Economic Stability Index rose by 0.3 to 66.1, suggesting consumer financial stability
• 15% year-over-year increase in discretionary spending
• Automotive Index climbed by 4.1 points since July
• Travel sector tracking 7.5 points above 2023 values despite seasonal slowdown

Negative

• 10% month-over-month decline in the New Mover Index, reflecting growing caution
• Job Market Sentiment Index dropped 4.6% compared to last year, indicating rising uncertainty
• Retail Index decreased by 12.6 points month-over-month due to early end of back-to-school shopping

Insights

Financial Analyst

The Zeta Economic Index (ZEI) offers a mixed but generally positive outlook for the US economy. The 0.6 point increase in the Economic Index Score to 67.4 suggests continued expansion, albeit with some caution. The 15% year-over-year surge in discretionary spending is particularly noteworthy, indicating consumer confidence. However, the 10% month-over-month decline in the New Mover Index and the 4.6% drop in Job Market Sentiment compared to last year signal growing uncertainty. The automotive sector's 4.1 point gain contrasts with retail's 12.6 point drop, highlighting sector-specific challenges. These divergent trends suggest a complex economic landscape where consumers are balancing spending with caution, which investors should monitor closely.

Market Research Analyst

The ZEI's insights reveal a nuanced consumer behavior pattern. The contrasting trends of increased discretionary spending and decreased moving activity suggest a 'stay-put and splurge' mentality. This could benefit companies in the home improvement and entertainment sectors. The 4.6% decline in Job Market Sentiment is a red flag, potentially leading to more conservative spending in the long term. The automotive sector's growth, driven by dealer incentives, may be short-lived as inventory clears. The travel sector's performance, while slowing, remains above 2023 levels, indicating resilience in leisure spending. Investors should watch for companies adapting to these shifting consumer priorities, particularly those offering value or unique experiences in a cautious economic climate.

Tech Expert

Zeta Global's use of AI-powered analytics in economic forecasting represents a significant advancement in real-time economic monitoring. By analyzing trillions of behavioral signals from over 240 million US consumers, the ZEI offers a more dynamic and potentially more accurate picture of economic trends than traditional survey-based methods. The index's ability to recalibrate monthly based on actual behavior is particularly valuable in today's rapidly changing economic landscape. However, investors should note that while AI-driven insights can provide valuable foresight, they should be considered alongside traditional economic indicators for a comprehensive view. The technology's potential to identify subtle shifts in consumer behavior could offer early indicators of economic turns, making it a powerful tool for strategic business planning and investment decisions.

Modest growth in monthly economic index score despite declines in key indicators

NEW YORK--(BUSINESS WIRE)-- Zeta Global (NYSE: ZETA), the AI-Powered Marketing Cloud, today released the Zeta Economic Index (ZEI) for August 2024. The ZEI is one of the first AI-powered economic indexes, utilizing Zeta's proprietary Generative AI technology and real-time consumer behavior from over 240 million US consumers to reflect the current state and trajectory of the US economy.

The two primary measures of the ZEI -- Economic Index Score and Economic Stability Index -- both showed incremental gains for the month of August. This upward movement indicates that the US economy remains in expansion despite stronger headwinds including a more challenging job market, turbulent stock market and continued uncertainty. Specifically:

• Economic Index Score: Increased by 0.6 from July to 67.4 and is defined as “Active”, which is characterized by robust economic activity with healthy growth across various sectors. This is an acceleration from July, when the month-over-month increase was 0.3.
• Economic Stability Index: Increased by 0.3 from the previous quarter to 66.1 and is defined as Stable, which is defined as individuals having a steady income, allowing them to manage short-term financial disruptions with relative ease.

"The Zeta Economic Index continues to demonstrate the resilience of the US consumer, even in the face of economic headwinds,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta Global. “Our latest data reflects modest but steady growth, underscoring the adaptability of consumers as they navigate a challenging job market and ongoing uncertainties. At Zeta, we are committed to empowering businesses with the actionable intelligence they need to meet the demands of today’s consumer in this dynamic environment.”

Additional highlights from the ZEI:

• Mixed Consumer Behavior Reveals Diverging Spending Patterns: Recent data in the ZEI highlights a bifurcation of consumer spending patterns. Discretionary spending has surged, showing a notable 15% year-over-year increase, in-part attributed to back-to-school spending but also suggesting that many consumers remain willing to indulge in non-essential purchases despite ongoing economic uncertainties. In contrast, the New Mover Index tracking cohort activity has declined by 10% month-over-month, reflecting a growing caution.
  
• Job Market Sentiment Reflects Rising Uncertainty: Concerns about job stability are becoming more apparent, with the Job Market Sentiment Index dipping 4.6% compared to last year’s value at this time. This decline underscores an increasing sense of unease among workers as economic conditions continue to evolve.
  
• Automotive Sector Gains Momentum Amid Retail and Travel Challenges: The Automotive Index has climbed by 4.1 points since July, driven in part by aggressive dealer incentives aimed at clearing excess inventory ahead of the new model season. However, the Retail and Travel sectors are facing headwinds. The Retail Index has dropped 12.6 points month-over-month, attributed to early end to back-to-school shopping. The travel sector is expectedly experiencing a slowdown as summer vacations wind down, but still tracking above 2023 values by 7.55.0 points

The ZEI utilizes generative AI to analyze trillions of behavioral signals providing comprehensive scores that reflect economic sentiment, trends, and dynamics. Unlike surveys, this index utilizes over 20 proprietary inputs that recalibrate each month based on actual behavior, enhancing the understanding of a key driver of economic growth – consumer activity.

The Zeta Economic Index is publicly available here and is provided as a complimentary service. It should not be considered investment advice or be relied upon to make investment decisions.

About Zeta Global

Zeta Global (NYSE: ZETA) is the AI-Powered Marketing Cloud that leverages advanced artificial intelligence (AI) and trillions of consumer signals to make it easier for marketers to acquire, grow, and retain customers more efficiently. Through the Zeta Marketing Platform (ZMP), our vision is to make sophisticated marketing simple by unifying identity, intelligence, and omnichannel activation into a single platform – powered by one of the industry’s largest proprietary databases and AI. Our enterprise customers across multiple verticals are empowered to personalize experiences with consumers at an individual level across every channel, delivering better results for marketing programs. Zeta was founded in 2007 by David A. Steinberg and John Sculley and is headquartered in New York City with offices around the world. To learn more, go to www.zetaglobal.com.

Source: Zeta Global

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903676012/en/

Investor Relations

Scott Schmitz

ir@zetaglobal.com



Press

James A. Pearson

press@zetaglobal.com

Source: Zeta Global

FAQ

What is the current Economic Index Score for Zeta Global (ZETA) in August 2024?

The Economic Index Score for Zeta Global (ZETA) in August 2024 is 67.4, which increased by 0.6 from July and is defined as 'Active', indicating robust economic activity with healthy growth across various sectors.

How has discretionary spending changed according to Zeta Global's (ZETA) August 2024 report?

According to Zeta Global's (ZETA) August 2024 report, discretionary spending has surged, showing a notable 15% year-over-year increase, partly attributed to back-to-school spending and suggesting consumers remain willing to make non-essential purchases despite economic uncertainties.

What does the Job Market Sentiment Index indicate in Zeta Global's (ZETA) latest economic report?

In Zeta Global's (ZETA) latest economic report, the Job Market Sentiment Index has dipped 4.6% compared to last year's value, reflecting rising uncertainty and an increasing sense of unease among workers as economic conditions evolve.

How has the Automotive Index changed in Zeta Global's (ZETA) August 2024 economic report?

According to Zeta Global's (ZETA) August 2024 economic report, the Automotive Index has climbed by 4.1 points since July, driven in part by aggressive dealer incentives aimed at clearing excess inventory ahead of the new model season.