Consumer spending rebounds in March -- here's what people are buying

Yahoo Finance's Brian Sozzi breaks down the latest consumer spending trends amid the pandemic.

Video Transcript

JULIE HYMAN: As the economy reopens, people are going to be spending money on different stuff, presumably. Brian Sozzi, you're looking at what stuff-- or, not necessarily stuff, what services-- people are going to be spending money on. Maybe it's not what we expect.

BRIAN SOZZI: No, Julie, and I love this mobility data that the econ team over at Jefferies puts out. And they noted months ago that consumers were spending more on apparel. Look, around the time of spring, as they, I guess, projected that they would be traveling more in the coming weeks as they got vaccinated, but they are now noting a key term.

But worth noting first, Jefferies knowing the US Activity Index, which they track, that consumer metric part of that chart that you see here has started to level off a little bit. That tells you perhaps the sugar high from-- sugar high in terms of spending from those stimulus checks is starting to wear off. And then you look at Jefferies also putting out what they call the foot traffic index. This measures traffic at restaurants, retailers, and a host of other companies as well. That has also started to tick down versus levels seen in the spring.

Also, US retail web traffic index out of Jefferies, that has started to decline just a little bit. Having said that, what is not declining is restaurant bookings. You look here. Jefferies out, noting restaurant bookings have absolutely surged in recent weeks. And I think, in terms of my take today, is you're starting to see a shift in what consumers are buying, from more goods to now services, whether it's going out to a restaurant potentially, likely going on a trip, booking a cruise when those start to resume likely later this year, booking a vacation perhaps to a Disney World.

They have their clothes already. Now they're more interested in looking to services. And Julie, obviously, that will change how investors bet on the consumer rebound here after the pandemic.

JULIE HYMAN: Yeah, I mean, this is a change that was anticipated, right? But we were looking for it to gain a little bit of momentum. And it finally seems to be doing that. What is surprising, though, about this is, one would think, like, we've been talking about all the new clothes that you're going to need to go on your cruises and your Disney Worlds. And you need pants that zip and button again. I don't know. I mean, and we are seeing in the data some of that as well. But maybe-- I don't know-- maybe not as much as we thought.

BRIAN SOZZI: Well, listen, I think we learned from an Under Armour today, Levi's, et cetera, before then, just in terms of their earnings reports. Consumers spent a great deal in the first quarter. They realized they had to rebuild their closets after, really, not shopping for clothes or maybe just buying some leggings or joggers the past year. So they needed new stuff. They had to fit into some new stuff.

Certainly, styles have changed, too, in the past year. But now that they have that stuff and they splurged in the first quarter, now they're going to be looking to wear this stuff somewhere likely on a vacation. So, just by nature, they're buying less apparel and now putting their money to work on more services.

JULIE HYMAN: Makes sense.