Amid the resurgence of COVID-19 cases, rising inflation, and supply chain logjams, U.S. retail sales have been rising since August, with a 1.7% month-over-month increase in October, owing to declining jobless claims and rising consumer spending ahead of the holiday season.
Further, the inelastic demand for consumer goods across business cycles has been helping the industry offset the consequences of high inflation. Investor optimism in this space is evident in the First Trust Consumer Staples AlphaDEX ETF’s (FXG) 3.7% gains versus SPDR S&P 500 Trust ETF’s (SPY) 3.3% returns over the past month. The global consumer goods (FMCG) market is expected to grow at 5.4% CAGR to reach $15.36 trillion by 2025. So, both CL and PG should benefit.