Welcome to Thoughts on the market. I'm Melen Zentner, Chief U.S.

Economist for Morgan Stanley Research. And I'm Adam Vergodamo, U.S.

Equity Strategist. And on this episode of the podcast, we'll be talking about a possible shift in U.S. consumer spending for 2021, along with some key themes for investors.

It's Thursday, January 28th at 11 a.m. in New York.

So Ellen, as we look back to 2020, we saw consumer spending

in the services category, things like dining, lodging, casino gaming, all take a big hit as the

U.S. weathered COVID-19 lockdowns.

At the same time, spending on goods actually soared.

So as vaccines continue to roll out through 2021 and perhaps into next year,

how do you see consumer spending trends evolving?

You know, you pointed out that spending on goods, both durable and non-derable goods, really soared

last year and that's really what drove GDP overalls. The way I think about it for 2021 is a shift in growth leadership. So this is not a normal

downturn and COVID has hampered the services side of the economy and so as we were opening up last year we had a tremendous amount of

pent-up demand come through for durable and non-derable goods while services remained shuttered

at least for the high density areas of the economy and at least limited.

And so this year really changes.

We've met a lot of the pent-up demand in durable goods and non-derable goods spending and services

is where we can reap the most benefits where the most

pent-up demand for the longest has been building and so as we move through the

dissemination of the vaccine by the middle of the year the cloud of COVID won't have lifted but at least

it's thinning.

And already before them we think that economic activity will pick up and households will be seeking

...