Zeta Global, an AI-powered marketing cloud, released its Zeta Economic Index (ZEI) for September 2024.
The ZEI’s primary measure of U.S. economic health, the economic index score, registered 69.1 points, which represents a modest month over month (M/M) increase of 1% over the August value. The consistent upward trajectory in 2024 reflects stabilizing consumer confidence, increased business activity and an improvement in the job market sentiment, leading to stable growth. The recent decision by the Federal Reserve to cut interest rates is expected to accelerate these trends.
“The Zeta Economic Index shows that consumers and businesses are adapting to a new economic normal,” David A. Steinberg, co-founder, chairman and CEO of Zeta Global, said. “The data shows modest but steady growth over the past month, illustrating that some of the prior uncertainty is shifting toward optimism with a renewed propensity for spending. While the economy is showing modest momentum rather than firing on all cylinders, the ZEI predicts that businesses can expect a more robust holiday shopping season in line with an expanding economy.”
Additional highlights from the ZEI:
- Consumer Purchasing Power is Expanding: Both discretionary spend propensity and credit line expansion intent have shown M/M increases of 7.2% and 18.4% respectively, underscoring confidence in the direction of the economy. The time browsing online index, which incorporates online shopping activity, also recorded considerable gains M/M suggesting healthy e-commerce activity heading into the final quarter of the year.
- The Job Market is Transitioning: Job market sentiment saw a modest uptick of 0.6% M/M, indicating a slight improvement in employment outlook. This shift is illustrative of new and emerging labor market opportunities in construction and healthcare, and in anticipation of future prospects as a result of the interest rate reduction.
- Vertical Strength is Mixed, with the Financial Sector Under Pressure: The financial sector was down 1.8 points, a result of Americans waiting for the Federal Reserve’s interest rate update mid-month. The uptick in credit line expansion intent suggests financial service products will show renewed interest in the final quarter of the year as rate-cuts improve the borrowing landscape. The travel sector saw sizable M/M growth in consumer interest of 9.2 points, with seasonality, promotions and holiday planning in play. Dining and entertainment both saw small gains aligning with improved conditions around discretionary spending.
- Overall Auto Sector Sees Moderate Contraction: The broader automotive sector has seen an 11.1% decline month-over-month, possibly impacted by endemic conditions including supply chain issues affecting vehicle availability, the recent conclusion of summer promotions like Labor Day sales, and anticipation of upcoming major sales events such as Black Friday and end-of-year incentives. As a result, consumers are delaying their purchases in hopes of better deals and improved supply conditions.
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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.
