The Barbenheimer Effect
Throughout the summer, waves of both Americans and tourists have fled to box offices and music venues to capture a glimpse of social media-bolstered pop culture. Whether it be popular movie blockbusters like Barbie and Oppenheimer, or stadium tours from artists Taylor Swift and Beyonce, the recent mass social-run movement has had measurable effects on consumer spending figures. The U.S.’s third-quarter real consumer spending report is estimated to come in 1.9% higher, depicting a continued trend of a robust consumer. However, there is a chance these numbers could be inflated by both the recent movie blockbusters and music tours, a report by Morgan Stanley found.
For the entirety of the third quarter, 0.6 percentage points of the 1.9% estimate are expected to come from revenues from Barbenheimer, Beyonce, and Taylor Swift tours. The volume of spending surrounding these few events is unprecedented, with almost one-third of this quarter’s real PCE growth being attributed to these factors. Despite the success, analysts worry about what this inflated number may pose for fourth-quarter spending, which already has another impact plaguing its performance. The resumption of student loan payments following Biden’s failed push to cancel student debt will begin in October, attributing to 0.8 percentage points of decreased spending. Coupled with the lack of pop culture’s estimated 0.6 percentage point boost this quarter, real PCE is expected to contract by 0.6% between the third and fourth quarters. With GDP in turn estimated to be only a 0.1% gain for this year’s last quarter, it will be interesting to see how the Fed will respond to this pending shrinkage of consumer spending.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.