Navigating Economic Divergence: Insights from the July 2024 Zeta Economic Index 

The Zeta Economic Index (ZEI), a pioneering AI-powered economic barometer from Zeta Global, offers a comprehensive look into the US economy. By leveraging real-time consumer behavior data and Generative AI technology, the ZEI provides an unparalleled insight into economic trends.  

This month’s report for July 2024 reveals a mixed economic outlook, with both promising and cautionary signals. Let’s explore the key highlights and industry-specific insights from the latest ZEI release. 

Key Economic Indicators: Signs of Change

The latest ZEI report highlights some crucial economic indicators that paint a nuanced picture of the US economy: 

• Economic Index Score: Increased by 0.3% MoM to 66.7, indicating active and healthy economic activity. This represents a significant year-over-year increase, though the growth is less than in previous months. 

• Economic Stability Index: Also rose by 0.3% YoY to 66.1, reflecting stability in the economic environment. 

• GDP Growth: Annualized GDP growth was 2.8% in Q2 2024, up from 1.4% in Q1, driven by increased consumer spending, nonresidential fixed investment, and government spending. 

• Job Market Sentiment: Decreased by 1% MoM and nearly 4% YoY, despite notable job gains in the healthcare sector. 

For the month of July, the Economic Index Score and Economic Stability Index of the ZEI both show a marginal uptick, indicating a continued, if muted, expansion of the US economy, despite a slowdown in the growing job market. 

Consumer Spending Shifts

Despite positive movements in the overall economic indices, consumer spending patterns reveal underlying shifts: 

• Discretionary Spending: Decline in discretionary spending propensity, indicating a shift towards need-based purchases among lower socio-economic groups. 

• Credit Line Expansion: Increase of credit line expansion intent by 16.8% MoM (and a whooping 150.7% YoY), perhaps signaling an inability to cover everyday costs and greater need to access credit. 

Industry Insight: A Closer Look at Key Sectors

The ZEI also provides detailed insights into specific industry sectors, highlighting areas of growth and stagnation. 

Automotive 

• Automotive Index: Increased by 5.1 points MoM, showcasing robust growth fueled by high consumer demand and advancements in electric vehicles.  

• Automotive Purchase Intent: Increased 21.7% MoM, signaling not just customer demand, but intention to make purchases. 

• Policy Support: New incentives for electric vehicles have contributed significantly to this growth, reflecting the impact of governmental policies on consumer behavior. 

Retail and Dining

• Retail Sector: Experienced a modest increase in sales, up 3.9 points MoM, due to major promotional events including Amazon Prime Day and Back to School. However, overall retail activity remains neutral, suggesting mixed consumer engagement. 

• Dining Sector: Remains sluggish, with no discernible MoM improvement from previous lows. This can be attributed to the ongoing preference for convenience and delivery services, as well as the effects of inflation on food prices. 

Travel

• Travel Interest: Declined following a peak in June, indicating fluctuating consumer priorities and potential seasonal impacts on travel behavior. July saw travel decrease 3.3 points MoM. 

These indicators imply that although certain sectors are seeing heightened interest, overall consumer engagement and economic activity remain neutral.

Conclusion: Navigating a Divergent Economic Landscape

The July 2024 Zeta Economic Index provides a multifaceted view of the US economy, highlighting both strengths and areas of concern. While key economic indices show continued growth, albeit at a slower pace, sector-specific insights reveal a more complex and varied economic landscape.

The resilience of US consumers, despite shifting spending patterns and economic uncertainties, underscores the importance of monitoring these trends closely. 

As we move forward, the ZEI will continue to be an invaluable tool for understanding the dynamics of consumer behavior and economic activity. For a more detailed look at the latest economic trends and insights, visit the ZEI. 

Bonus: Read this article to learn how the ZEI works, and tips for reading the monthly report.