Consumer spending increased significantly in the first half of 2021, powered by continued economic recovery and an improved job market. Consumer spending, also known as personal consumption expenditures (PCE), increased 12% in the second quarter of 2021, following an 11.4% increase in the first quarter. As the spending trends continue, the consumer goods industry should keep benefiting. Moreover, given the relatively inelastic demand for these products, the industry should remain unaffected from any potential economic changes in the near term. Given this backdrop, both PEP and NSRGY should keep benefiting.
PEP has gained 7.9% over the past six months, while NSRGY has returned 5.9%. In terms of the past year’s performance, PEP is the winner with 14.2% gains versus NSRGY’s 2.9%. Furthermore, PEP’s 4.5% gains year-to-date compares with NSRGY’s 2.8% returns.