Omicron Hits, but Job and Spending Expectations Remain Strong

Special note:

I want to thank all my colleagues at Arbor Research and our tremendous clients for their steadfast support during my 15+ years offering data-driven research and solutions. This week will be my last at Arbor, but we as an organization have been preparing for Anthony Rizzo and Sergio Pineda to march ahead with the Arbor Data Science product. Expect continuity in the research service and a relentless quest to stay on the cutting-edge.

Over the most recent years, our data science group executed well-timed deep dives into fast-moving, granular alternative data finding the signal within the ample noise. We have witnessed countless organizations expand their horizons via new data series and move machine learning from the back to front offices. From natural language processing of central banks to the Google search activity of consumers and businesses, we have had the opportunity to bolster asset allocation and risk management decision-making during the pandemic’s rapidly changing and chaotic developments.

Please reach out to me ( or your contact at Arbor for any questions that you may have. Thank you again and best of luck on all future endeavors!

Best Regards,


Economist and investor expectations were looking way up for the fourth quarter before the Omicron variant dealt a blow following the Thanksgiving holiday. The average blue chip consensus resides just below 5% QoQ, while the Atlanta Fed’s GDPNow estimate plods ahead above 8% QoQ. As you know, nowcasting has proven extremely difficult throughout the pandemic, causing many like us to rely on alternative measure of consumer and business demand.

Overall, consumers remain poised to find new jobs and spend on small to large purchases like homes. High prices have yet to dent consumer demand regardless of anecdotal evidence. 

Consumers have maintained strong search activity for all things going out and spending since early summer. The chart below shows rolling five-week changes in this search activity by year. The year of 2021 in gray has been a significant outlier. Will we finally see consumer behavior fall back in line with longer-running seasonals?

The focus for the week away from continued Omicron coverage will be November’s employment report, which is expect to show a change of +535k along with very health wage gains of 5% YoY. The LFPR at 61.7% remains ultra-sluggish in its return to whatever normal will become. 

Fortunately, consumers’ search activity for job-seeking topics remains strong heading into December. A similar spread between favorable and unfavorable topics into October’s reference week helped telegraph the near 500k pace of job growth.

Be careful with mobility statistics thanks to last week’s Thanksgiving holiday. Nonetheless, travel planning has only moderately subsided heading into the winter months. Searches for car rentals have fallen, while the frequency of searches for air fares and vacations has only slowed. 

The resurgence in auto demand this fall has also been tempering according to searches. However a retreat in topics from Autotrader to VINs would be needed to signal a lasting shift in demand. High prices have yet to dissuade would-be buyers.

Some early stage components of the home buying process have slowed, namely preapprovals and determining down payment possibilities. On the flip side, transactions are still coming through as evidenced by rising searches for appraisals and agent-related tasks. 

Consumers are clearly dismayed by the extremely rampant rise in home prices. The UMich consumer sentiment survey for buying conditions of homes is at its worst since 1982, but they keep buying nonetheless! We urge caution over reading too much into surveys. Instead, keep your focus squarely on the unfiltered and unbiased intentions of consumers.

Lastly, consumers are still actively seeking rental apartments and homes. Mobility may have slowed heading into the holidays (U-Haul searches falling), but demand for one bedrooms to furnished homes has yet to recede.

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