In a Wednesday note to clients, Goldman Sachs strategists highlighted key issues that company managements have faced in the second quarter. After reviewing earnings call transcripts, the bank identified three dominant themes: the labor market, consumer behavior, and AI.
Although some companies have discussed reducing headcount or slowing hiring, the overall tone suggests a better alignment between hiring needs and the available workforce, marking a major shift from the post-pandemic period when labor shortages were a major issue. The share of companies mentioning labor shortages has now returned to pre-pandemic levels, and references to layoffs in earnings calls remained low in 2Q.
The US Consumer Dashboard also points to a reasonably healthy consumer, though economic data highlight growing disparities between income cohorts, with lower-income consumers facing slower income growth and divergent consumer sentiment compared to higher-income groups. “These AI infrastructure companies highlighted that continued investment in AI would translate into a continued tailwind for their businesses,” strategists said.