Taylor Swift, Beyonce juice 3Q GDP
Taylor Swift's Eras Tour was #1, pulling in nearly $800 million: Forbes
US economy’s ‘resiliency’ is largely due to consumer spending: Peter Morici
Former U.S. International Trade Commission Chief Peter Morici joined ‘Varney & Co.’ to discuss the state of the U.S. markets as investors attempt to navigate the economic impact of the Israel-Hamas war.
U.S. consumers treated themselves this summer, scooping up concert tickets to likes of Taylor Swift and Beyonce, singing and dancing to sold-out shows, while also driving record numbers for U.S. air travel.
Gross domestic product (GDP), came in at 4.9%, way above the 4.3% to 4.5% estimates and more than double the second-quarter’s 2.1% read.
3Q GDP: 4.9% vs. 2.1%
"It’s all the kind of revenge spending post-pandemic, which is especially concentrated in the service sector. Of course, you know, the poster child of that this summer is, of course, Taylor Swift," Carl Riccadonna, chief U.S. economist at BNP Paribas told FOX Business ahead of the data. "It was other concerts. It was sporting events, it was very strong, what we'll call discretionary service spending from hotels, Las Vegas trips, air travel and all these sorts of things" he added.
Taylor Swift recently made history with "Speak Now (Taylor's Version.)" (Tom Cooper / Getty Images)
Swift’s Eras Tour ranked at #1 raking in $780 million, according to Forbes list by gross. Ticket prices rocketed to over $1,000 for some shows on demand from Swifties.
Taylor Swift gave bonuses to her entire team, including her dancers. (Jeff Kravitz/TAS23/Getty Images for TAS Rights Management / Getty Images)
TAYLOR SWIFT TICKET PRICES SKYROCKET
Other high-profile performers also pulled in big bucks, including Beyonce’s Renaissance World Tour $460 million.
TORONTO, ONTARIO - JULY 08: (Editorial Use Only) (Exclusive Coverage) Beyoncé performs onstage during the "RENAISSANCE WORLD TOUR" at Rogers Centre on July 8, 2023, in Toronto, Ontario. ((Photo by Kevin Mazur/WireImage for Parkwood) / Getty Images)
Pink pulled in $300 million for her Summer Carnival Tour, while Coldplay and Ed Sheeran each topped out at over $200 million.
SACRAMENTO, CALIFORNIA - OCTOBER 12: Pink performs at Golden 1 Center on October 12, 2023 in Sacramento, California. (Photo by Tim Mosenfelder/Getty Images)
Summer travel, often marred with delays due to staffing shortages, also helped to move the needle with a record 227 million people scanned through U.S. airports, as reported by TSA.
Charlotte Hitchcock, 3, her sister Hazel, 2, and mother, Emily, wait in line to check in their luggage at Southwest Airlines at LAX for their flight to Denver, Colorado. They are from Los Angeles. ((Mel Melcon / Los Angeles Times via Getty Images))
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DAL | DELTA AIR LINES INC. | 63.41 | -0.41 | -0.64% |
| AAL | AMERICAN AIRLINES GROUP INC. | 14.61 | +0.09 | +0.62% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 97.44 | +0.61 | +0.63% |
| JBLU | JETBLUE AIRWAYS CORP. | 6.19 | +0.22 | +3.69% |
| LUV | SOUTHWEST AIRLINES CO. | 33.00 | +0.64 | +1.98% |
"3Q US GDP is expected to surge to a 4.3% annualized pace driven by a frenzy of summer travel and entertainment, that’s a big jump from Q2 and an unsustainable pace and expected to slow sharply in Q4" said Jeffrey Kleintop, chief global investment strategist of Charles Schwab, in an address to clients earlier this week.
Riccadonna agrees, pointing out a slowdown is already underway and will likely persist through year-end.
"Lending standards have tightened sharply for loans in general and consumer credit in particular, while loan demand has softened, according to various bank sector surveys. Consumer delinquency rates have picked up amid rapidly rising credit card and auto loan rates" he detailed in a research note.
CONSUMERS FALLING BEHIND ON AUTO LOANS AT RECORD RATE
To that point, consumers are falling beyond on their auto loans at a record pace, according to new data from Fitch. The firm also noted the geopolitical and domestic uncertainty swirling as risk factors. With Israel and Hamas at war and the struggle to around the new speaker of the House Rep. Mike Johnson (R-LA) who faces a daunting number of challenges in his new role.
HOW HIGH INTEREST RATES ARE ALREADY HITTING AMERICANS
BNP now sees growth in the fourth quarter sinking back to 1.5%, well below the standard 2%-3%+ that is considered a decent barometer for a healthy economy.
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