CONSUMER WATCH
From BofA card data:
Credit and debit card spending per household increased 0.8% year-over-year (YoY) in May, compared to 1% YoY in April, according to Bank of America aggregated card data.
Seasonally adjusted (SA) spending per household declined 0.7% month-over-month (MoM), with the three-month seasonally adjusted annualized growth rate (SAAR) at -0.9% for May.
Bank of America card data shows that the decreases in both gasoline and retail (excluding gasoline and restaurants) spending offset the increase in spending on services. Payback from tariff buy ahead was clear in electronics, which saw a sharp pullback in May. A positive point for services was restaurants. And airline spending saw some improvement, although was still down nearly 11% YoY.
Some of the weakness in card spending may also be explained by the weather. While all regions saw a MoM decline in retail (excluding gas) spending, it was fairly weaker in the Midwest and Northeast, both of which experienced abnormally cold weather during the latter half of May, possibly subduing some consumer activity around the Memorial Day weekend. (…)
In Bank of America deposit data, YoY after-tax wage growth for Gen Z, Millennial, and Gen X higher-income households was around 3% YoY in May, but only 1% YoY for Baby Boomers and Traditionalists.
But despite their relatively stronger wage growth, when we look at credit and debit card spending the weakest cohort does appear to be Gen Z and Millennial households, particularly lower income, though Gen X households also look challenged. Older cohorts (Baby Boomers and Traditionalists), on the other hand, are showing faster card spending growth than other generations across income terciles. (…)
Rising housing costs will likely continue to be drains on the spending power of the young in coming months. At the same time, the resumption of student loan repayments may also crimp younger generations. The Department of Education has estimated that there could be up to 10 million people in default on their student loans in due course. In some cases, some delinquent loan holders may see wage garnishments later this summer, which would provide further headwinds to student loan borrowers’ spending.
While these factors are less important for Gen X, in our previous research on the Gen X cohort, we found that the need to save for approaching retirement is an additional constraint on this generation’s spending with their investments per household 40% higher than the overall population. (…)
At Walmart’s recently hosted 2025 Associates Week:
Consumers have not seen much of the impact from tariffs yet. The company has been surprised that most consumers do not appear to be anticipating this as they have not seen pre-buying behavior like they did in anticipation of the port strikes.
While some companies turned off receipts when China tariffs were at 145% but then quickly turned them back on when the tariff rate went to 30%, Walmart indicated they are seeing no evidence of a congested supply chain and product is flowing right now. (Goldman Sachs)
Trump Says China ‘Not Easy’ as Trade Talks to Resume Tuesday
Trade talks between the US and China will continue into a second day, according to a US official, as the two sides look to ease tensions over shipments of technology and rare earth elements. (…)
The US signaled a willingness to remove restrictions on some tech exports in exchange for assurances that China is easing limits on rare earth shipments, which are critical to a wide array of energy, defense and technology products, including smartphones, fighter jets and nuclear reactor rods. China accounts for almost 70% of the world’s production of rare earths.
Specifically, the Trump administration is prepared to remove a recent spate of measures targeting chip design software, jet engine parts, chemicals and nuclear materials, people familiar with the matter said. Many of those actions were taken in the past few weeks as tensions flared between the US and China. (…)
“China has been ripping off the United States for many years,” the US president said, while adding that “we want to open up China.”
The Trump administration expects that “after the handshake” in London, “any export controls from the US will be eased and the rare earths will be released in volume” by China, Kevin Hassett, head of the White House’s National Economic Council, told CNBC earlier in the day Monday.
Hassett’s comments from Washington were the clearest signal yet that the US is willing to offer such a concession, though he added that the US would stop short of including the most sophisticated chips made by Nvidia Corp. used to power artificial intelligence.
“The very, very high-end Nvidia stuff is not what I’m talking about,” Hassett said, adding that restrictions would not be lifted on the Nvidia H2O chips that are used to train AI services. “I’m talking about possible export controls on other semiconductors which are also very important to them.”
Huawei Technologies Co. founder Ren Zhengfei dismissed the impact of US export restrictions on China in a front-page People’s Daily article on Tuesday, telling the Communist Party’s official newspaper he wasn’t worried about Washington’s efforts to cut off the flow of US technology to China’s chip sector. Domestic firms could resort to means such as chip packaging or stacking to achieve results similar to that from advanced semiconductor technology, he said. (…)
Also in Bloomberg:
It’s still early. But as Jason Miller, a Michigan State University supply chains expert, pointed out last week, US trade data is already signaling alarming things. The US in April exported a fifth as many cars from Michigan to Canada as it did in a normal month in 2024, by his calculations. Which is not a good omen for Michigan autoworkers.
- Auto Sale Prices Surge as Tariffs Kick In Prices jumped 2.5% in April, the biggest monthly increase in 5 years.
Car buyers racing to get ahead of Trump’s tariffs face an uncomfortable truth — the trade war is already boosting US auto prices, often in ways nearly invisible to consumers. The sticker price on a particular make and model may not have changed, at least not yet. But automakers have been quietly cutting rebates and limiting cheap financing deals, adding hundreds of dollars to buyers’ monthly payments even as the companies say they’re holding the line on pricing.
- The Port of Los Angeles is experiencing a significant decrease in ships and cargo, with an average of five ships per day over the past seven days, compared to a normal dozen, due to President Trump’s trade war,
- How Trump’s approach plays out in the long term remains to be seen. For now, however, the constant shifting of his tariff strategy has “got people spooked,” said Andrew Anagnost, chief executive officer of Autodesk Inc., which sells software used by manufacturers to design factories and improve manufacturing processes.“The current operating mode is just the death to long-term investment,” Anagnost said. Construction work that was already underway or in the backlog is continuing but the uncertainty “is stalling future projects.”
Xi Urges South Korea’s Lee to Help Safeguard Free Trade
Chinese President Xi Jinping held his first phone conversation with South Korea’s newly elected President Lee Jae-myung and called for cooperation to safeguard multilateralism and free trade. (…)
“We should strengthen bilateral cooperation and multilateral coordination, jointly safeguard multilateralism and free trade, and ensure the stability and smoothness of global and regional industrial chains and supply chains,” Xi said, according to the CCTV report.
Xi said the two countries should promote their strategic partnership to a higher level and “inject more certainty” into the regional and international landscape, the reports said.
Lee asked China to play a constructive role to build peace on the Korean peninsula and said he hoped to promote bilateral ties in areas including economy, security and culture “under the spirit of mutual benefit and equality,” Lee’s spokesperson said. The South Korean president invited Xi to join the APEC summit in November, to be held in the southeastern city of Gyeongju. (…)
Lee has signaled a more cautious stance on taking sides between the US and China. That marks a shift from Yoon, who emphasized closer ties with Washington and a trilateral partnership with Japan. (…)
Xi’s comments underscore China’s efforts to project itself as one of the bulwarks of free trade and multilateral cooperation in contrast to US protectionism and bilateral deal-making.
China is still South Korea’s biggest trading partner and while the US has closed the gap as an export market, Seoul has long needed to tread a careful path between the two rival economies. Still, any efforts by Lee to balance the handling of relations may not be warmly welcomed by the US. (…)
Highlighting the tricky balancing act facing South Korea’s new leader, a White House official expressed concern over “Chinese interference and influence in democracies” after Lee’s victory, while saying South Korea’s election was free and fair.
Lee is set to fly to Canada to attend the Group of Seven summit next week. While South Korea is not a G-7 member, Lee was invited to participate, according to his office. The visit could give Lee a chance for his first in-person meeting with Trump following their initial phone call on Friday.
Lee has said that shielding South Korean exports from Trump’s tariff regime would be his top priority in bilateral discussions.
Beijing Woos US Influencers With Free Trip to Show ‘Real China’
China is inviting American influencers to join a 10-day, all-expense paid trip through the country this July, as part of Beijing’s efforts to boost people-to-people exchanges and showcase the “real China.”
The initiative, titled “China-Global Youth Influencer Exchange Program,” seeks to enlist young social media influencers with at least 300,000 followers to collaborate with Chinese content creators, according to recruitment posts by Chinese state-affiliated media outlets, including the China Youth Daily. (…)
The trip intends to take the participants across five Chinese cities — Suzhou, Shanghai, Shenzhen, Handan and Beijing, and will cover China’s e-commerce hubs, the headquarter of companies such as Xiaohongshu Technology Co. and BYD Co. (…)
American streamer IShowSpeed’s visit to China has sparked widespread curiosity among fans about cutting-edge advancements in Chinese technology, as products from Huawei Technologies Co. and BYD Co. are put in the spotlight.
IShowSpeed, whose real name is Darren Watkins Jr., live-streams regularly to his 38.4 million YouTube subscribers, often for hours at a time. (…)
His unscripted manner appears authentic and relatable, helping to build trust among his audience that he’s genuinely wowed by the technology, said Barbara Duffek, assistant professor of marketing at Georgia State University. “It’s better than any official, scripted endorsement.”
In an almost six-hour livestream that was viewed 8 million times, Watkins rode a BYD Yangwang U8 luxury SUV that can float in water, screaming in fear at first as the vehicle was driven into a river.
“Oh my god, this car is not sinking, and we are in the car! China got it, these Chinese cars got it bro,” he shouted later while filming himself perching over the vehicle through its sunroof.
Later in the same stream, Watkins visited a Huawei store in Shenzhen and bought three Huawei Mate XTs, the world’s first commercial device that can fold twice from a tablet to a smartphone. (…)
“Yo nobody got these in the world, these only made in China? I’m about to bring these sh—t back to America,” he said in awe as he tested various models. “It’s a gaming PC in a phone format.”
Viewers online have commented on how Chinese technology is on “another level” and underrated, with some remarking how backward the US seems to be.
“The Western media made me dislike China. Speed opened my eyes to the truth. Now I hope to visit China in the future,” a comment on a video of Watkins doing a backflip in sync with a humanoid robot read. (…)
Elsewhere:
The sense of technology on the streets is also the focus of foreign bloggers. The efficient and convenient high-speed rail network, easy-to-use mobile payment, and shared bicycles that can be seen everywhere are deeply loved by some foreign bloggers. The driverless buses on the road, the smart service robots in the hotel, and the speeding maglev trains have made their experience “maximum”.
A Canadian travel blogger’s video with the highest number of views on overseas social platforms is a photo of new energy vehicles filling the streets of Shanghai. Tuo Yan’ai, associate professor at the School of Tourism and Service Engineering of Nankai University, believes that foreign tourists are surprised by China’s advanced infrastructure and high technology, and that high-tech elements have greatly enhanced the convenience and experience of travel.
In the titles of foreign bloggers’ videos, high-frequency words are usually “unexpected” or “never thought of”, or some exclamation words to express their sensory “shock”. For example, “We never thought China would be like this!” “Is this what China really looks like?” “It’s crazy! Unbelievable!” (Xinhua News Agency)
From Perplexity.ai:
For a firsthand, recent look at China’s high-tech advancements through the eyes of a tourist, the video “This Is Why China’s Innovation Leaves the Rest of the World Behind” by Rafa Goes Around (published April 27, 2025) stands out as a comprehensive and engaging. In this video, the creator shares his personal experiences living and traveling in China, highlighting the everyday technologies and futuristic innovations that are now commonplace in Chinese cities.
Also, several recent videos from 2025 offer fresh, in-depth looks at China’s high-tech advancements—many featuring direct tourist or visitor experiences.
1- “China’s New Tech Shocks the U.S. — The World Will Never Be the Same” (Top 10 Discoveries Official, May 22, 2025)
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Explores eight breakthrough technologies that are reshaping daily life in China, including:
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Quantum computers outperforming U.S. supercomputers
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Mass adoption of humanoid robots
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Driverless taxis and flying cars (e.g., E-Hang 216S eVTOL aircraft now in commercial use)
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Homegrown AI chips and brain-computer interfaces
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2. “Made in China 2025: China’s Tech Shock Stuns Critics!” (RevoNow, May 16, 2025)
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Covers China’s rise as a global tech leader:
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SMIC’s 5nm chip breakthrough, Huawei’s AI, and BYD’s EV dominance
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The world’s largest 5G network and rapid infrastructure growth
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3. “Made in China 2025: The Future of Tech Innovations Revealed!” (RevoNow, May 29, 2025)
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Deep dive into the “Made in China 2025” plan and its impact on global technology
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Highlights smart chip ecosystems, IoT, AI integration, and how these are embedded in devices and services tourists use daily.
Inflation Expectations Declined Across All Horizons, NY Fed Says
Consumers’ expectations for future price pressures improved across all horizons in May, and households’ pessimism about the labor market somewhat eased, according to monthly survey data released Monday by the Federal Reserve Bank of New York.
Median expectations for inflation one, three and five years ahead all decreased in May. The decline was most significant in projections for year-ahead price growth, which dropped to 3.2% from 3.6% in April. Expectations for inflation three years ahead fell to 3% from 3.2%, and forecasts for five years ahead edged down to 2.6%.
The responses came as President Donald Trump struck a deal that significantly — though temporarily — lowered tariffs on imports from China. They also fell in line with other household-based surveys pointing to a rebound in sentiment in the wake of the announcement. (…)
Americans’ views about their job prospects also improved slightly in May. The perceived probability of losing one’s job in the next year dropped 0.5 percentage point, while respondents’ likelihood of quitting voluntarily ticked up. The mean expectation that the unemployment rate will be higher one year from now decreased, though still remained well above its 12-month average.
Households’ perceptions of their own finances also improved, with the share of respondents saying they will be worse off in a year declining slightly. A smaller share of participants reported that it was harder to access credit. The average perceived probability of missing a minimum payment in the next three months dropped to the lowest since January.
The mean perceived probability that the US stock market will be higher 12 months from now increased.
Latest data from Indeed Job Postings (May 30th) show a resumption of the decline in postings in the last week of May:
The Canned-Food Aisle Is Getting Squeezed by Rising Steel Tariffs Steel used in cans is mostly imported—and subject to the Trump administration’s new 50% levy
Cans used for food require tin-coated, ultrathin sheet steel made from molten iron. Not much is produced in the U.S., where domestic producers have been scaling back production for years.
The Trump administration’s new 50% duty on imported steel could increase store prices for items in steel cans by 9% to 15%, according to the Consumer Brands Association, a trade group whose members include Campbell’s, Hormel Foods and Del Monte Foods. At that rate, the price of a can of vegetables costing $2 could increase by 18 cents to 30 cents. (…)
Tariffs are likely to drive up prices for domestic-made steel, too, as U.S. producers raise their own prices.
Can manufacturers say they will continue to buy lots of imported tin-coated steel, known as tin-plate—because there isn’t enough of it made in the U.S. to supply them. (…)
Can manufacturers estimate that about three-quarters of tin-plate consumed in the U.S. is foreign-made, with much of it coming from Europe and Canada.
Tin-plate is made with steel derived from molten iron, but most steel in the U.S. is now made from melted scrap, and that doesn’t measure up to the can industry’s exacting quality standards. (…)
- “Category growth rates in the U.S. have slowed from around 4% last calendar year to about 2%. We expect to reduce up to 7,000 non-manufacturing roads or approximately 15% of our current non-manufacturing workforce.” – Procter & Gamble ($PG ) CFO Andre Schulten
Retail Crowd Is Taking Bigger and Riskier Swings
Whether you look at record inflows into a Tesla ETF or Palantir’s meteoric rally, it’s clear that day traders are eager to speculate.
Investors poured $651 million into the Direxion Daily TSLA Bull 2X Shares (ticker TSLL), marking the largest weekly inflow since the fund’s 2022 debut, according to data compiled by Bloomberg. The biggest chunks came in Thursday and Friday.
And in the AI space, investors are hunting for the next Nvidia-like play as tech giants keep spending heavily on computing infrastructure. (Just look at Zuckerberg’s new effort to micromanage an new AI project that the company is doing alongside a planned multi-billion dollar investment in Scale AI.)
Palantir has soared 75% this year and now carries a valuation of 71 times estimated sales, making it the most expensive stock in the S&P 500. Coreweave, which rents cloud-computing capacity, has quadrupled since going public in March.
Then there’s Bitcoin, which has rallied back to around $110,000, meaning every purchase by Michael Saylor’s Strategy over the last four plus years is now profitable.
Strategy has made around 70 separate purchase announcements since Saylor began to invest cash from the enterprise software maker’s balance sheet into Bitcoin in the middle of 2020. That includes 15 purchases of $1 billion or more of Bitcoin, according to data compiled by Bloomberg. As the price of Bitcoin fluctuated over the years, many of the purchases were periodically under water.
FYI:
“Trump said yesterday that Iran is pressing to be allowed to enrich uranium, and expressed worry that Tehran was seeking too much. “They are good negotiators, but they’re tough,” the US president said.” (Axios)
Iran, China, Russia and many others seem to be “tougher negotiators” than expected…