Why Jim Cramer is concerned about the ‘experience economy’

CNBC’s Jim Cramer on Thursday expressed concern about the “experience economy,” businesses related to travel and leisure.

“Thanks to a combination of weak macro indicators and some discouraging earnings reports, I’m much more worried about the experience economy than I was a month ago,” he said. “While we can’t say the whole theme is dead yet, it’s clearly in a precarious situation at the moment, so we’ll continue to monitor this area closely.”

Kramer suggested the leisure industry boomed post-COVID-19 as consumers wanted to splurge on travel, theme parks, concerts and restaurants. But now, he noted, consumers may not be willing to spend money in the same way. He said that without federal statistics, the macroeconomic situation is unclear, but it is clear that the labor market is weakening. Recent report from a major payroll company that was “already anemic” before the shutdown ADP Cramer explained that jobs will be lost in October. He also said that despite signs of softening employment, the Federal Reserve may be reluctant to cut interest rates due to widespread uncertainty, and inflation still appears to be trending upward.

Poor returns due to rapid causality names chipotle pepper, hippopotamus and sweet green Mr. Kramer was concerned, noting that all three said younger customers were eating fewer meals away from home. he said royal caribbean‘s earnings outlook was somewhat disappointing, suggesting that Wall Street is growing wary of cruise lines in general. live nationHe further said the stock price plummeted after failing to meet profit and revenue expectations, citing a lack of concert business. Kramer also pointed out walt disneymissed Thursday’s earnings — the entertainment giant acknowledged weakness in its parks and cruise division, with management hinting at slower growth in the division in the second half of the year.

While much of this data paints a negative picture of the experience economy, Kramer pointed out that: american expressis a credit card giant known for its travel rewards and continues to enjoy success. He also said many of these leisure stocks have fallen significantly, so there could be an opportunity for them to rise. Cramer added that if stocks continue to fall, the Fed may have to cut interest rates, which could help revive the sector.

“I hope that the end of the government shutdown will breathe new life into the group that I have championed since the end of the coronavirus,” he said. “But that’s probably not enough.”

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Disclaimer CNBC Investing Club Charitable Trust owns stock in Walt Disney.