The U.S. economy grew at a surprisingly high 2.6% annual rate in the third quarter, reversing two consecutive quarters of declines. But beneath the strong headline number were signs that consumers are feeling the pinch of inflation and that the housing market has been hit by this year’s dramatic rise in interest rates.
Nevertheless, quarterly growth of this magnitude should reassure investors that the U.S. has not, at this point, been plunged into recession. Fears of an economic slowdown have been front of mind this year amid a dramatic tightening of financial conditions by the Federal Reserve. The central bank is attempting to get inflation, which is at its hottest in decades, under control by boosting interest rates.
But one quarter of growth doesn’t mean the risk of a slowdown has passed.
“The trajectory for growth looks weak,” said Jeffrey Roach, the chief economist at LPL Financial. “A deteriorating housing market and nagging inflation along with an aggressive Federal Reserve puts the economy on unsure footing for 2023.”
The market reaction was still upbeat. The Dow Jones Industrial Average was rising 375 points, or 1.2%, on Thursday.
After all, the result was a significant surprise to the upside. Economists surveyed by FactSet had estimated that the economy grew at a 2% annual rate in the three months to the end of September, following declines of 0.6% and 1.6% in the second and first quarter, respectively. The first half of the year marked a technical recession, defined as two consecutive quarters of negative gross domestic product growth.
The rise in third-quarter growth reflected net increases in exports, matching expectations that the trade deficit had narrowed as a result of a steep drop in imports, in part due to bloated inventories at some retailers. It was much fewer imports of consumer goods that led to the overall decline.
International trade dynamics may have been what ultimately delivered such strong growth in GDP, but investors would do well to examine some of the more telling components in the data.
Consumer spending increased overall, reflecting money flowing to healthcare and other services. But shoppers stopped digging as deep in their pockets to purchase goods, with data showing a deceleration of spending on cars, parts, and food and beverages. This was the third straight quarter in which goods spending fell, indicating a squeeze on consumers.
Amid signs that inflation remains persistently high—with two more interest-rate decisions due from the Federal Reserve this year—these trends are important.
As are indications that the U.S. is facing a slowdown in the housing market. GDP growth was primarily weighed down by a decrease in residential housing investment, and especially single-family home construction. The Fed’s hawkish shift on interest rates has had a knock-on effect on the mortgage market and created what some economists have called a housing recession.
The data out Thursday may be as good as it gets for a while.
“We expect 3Q22 to mark the peak in quarterly growth, as the cumulative effect of tighter monetary policy begins to push growth below potential,” said Ellen Zentner, the chief U.S. economist at Morgan Stanley. The bank expects to see GDP growth in the fourth quarter of just 0.8%.
“There’s a distinct possibility that Q3 could be the last hurrah for this post-pandemic economic expansion, as the U.S. faces material economic headwinds as a result of the Fed’s aggressive tightening cycle,” said Michael Reynolds, vice president of investment strategy at Glenmede.
The growth picture is likely to get gloomier as the full impact of the Fed’s monetary policy ripples across the economy—a process that can take many months or a year. The central bank is expected to hike rates by 75 basis points, or three quarters of a percentage point, for the fourth time since June next week. That, and another rate decision in December, will only show up in the data deep in 2023.
By that point, this year’s third quarter likely will look even better.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Booming demand for wellness tourism shows no slowing, with travel related to health and well-being projected to have reached $1 trillion last year and to hit $1.3 trillion by 2025, according to the Global Wellness Institute, a nonprofit based in Miami.
Curated wellness travel programs are especially sought-after, specifically holistic treatments focused on longevity. Affluent travellers not only are making time to hit the gym while gallivanting across the globe, they’re also seeking destinations that specifically cater to their wellness goals, including treatments aimed at living longer.
“I believe Covid did put a spotlight on self-care and well-being,” says Penny Kriel, corporate director of spa and wellness at Salamander Collection, a group of luxury properties in places like Washington, D.C., and Charleston, South Carolina. But Kriel says today’s spas are more holistic, encouraging folks to understand the wellness concept and incorporate it into their lifestyle more frequently.
“With the evolution of treatment products and technology, spas have been able to enhance their offerings and appeal to more travellers,” Kriel says.
While some growth is connected to the variety of treatments available, results and the digital world are also contributing to the wellness boom.
“The efficacy and benefits of these treatments continue to drive bookings and interest, especially with the support of social media, influencers, and celebrity endorsements,” Kriel says.
While genetics, environmental factors, and lifestyle choices such as regular exercise, a diet free of processed foods, sufficient sleep, and human connection play essential roles in living well and longer, experts believe in holistic therapies to help manage stress, boost immunity, and ultimately influence length and quality of life.
Anti Ageing and Beyond
“For years, people have been coming to spas, booking treatments, and gaining advice on how to turn the clock back with anti ageing and corrective skin treatments,” Kriel says. However, today’s treatments are far more innovative.
On Marinella Beach in Porto Rotondo, on the Italian island of Sardinia, guests at the five-star Abi d’Oru Hotel & Spa can experience the resort’s one-of-a-kind “longevity treatment,” a unique antiaging facial using one of the island’s native grapes: Cannonau. The world’s first declared “Blue Zone”—one of five designated areas where people live longer than average, some into their 100s—Sardinia produces this robust red wine varietal, the most widely planted on the island.
Known as Garnacha in Spain and Grenache in France, Cannonau supposedly contains two to three times more antioxidants than other red-wine grapes. By incorporating Cannonau, Abi Spa says its unique 50-minute longevity session increases collagen production for firmer, younger-looking skin.
Maintaining a youthful appearance is just one facet of longevity treatments, which range from stress-reduction sessions like massage to nutritional support and sleep programs, Kriel says. Some retreats also offer medical services such as IV infusions and joint injections.
Keeping with the trend, Kriel is expanding Salamander Collection’s existing spa services, such as detox wraps and lymphatic drainage, to include dedicated “Wellness Rooms,” new vegan and vegetarian menu items, and well-being workshops. “Sleep, nutrition, and mindfulness will be a big focus for integration in 2024,” she says.
Skyler Stillings, an exercise physiologist at Sensei Lanai, a Four Seasons Resort—an adults-only wellness centre in Lanai, Hawaii—says guests were drawn to the social aspect when the spa opened in November 2021.
“We saw a huge need for human connection,” she recalls. But over the past few years, what’s paramount has shifted. “Longevity is trending much more right now.”
Billionaire co-founder of tech company Oracle Larry Ellison and physician and scientist Dr. David Angus co-founded Sensei. After the death of a mutual close friend, the duo teamed up to create longevity-based wellness retreats to nurture preventative care and a healthy lifestyle. In addition to the Lanai location, the brand established Sensei Porcupine Creek in Greater Palm Springs, California, in November 2022.
Sensei has a data-driven approach. The team performs a series of assessments to obtain a clearer picture of a guest’s health, making wellness recommendations based on the findings. While Sensei analyses that data to curate a personalised plan, Stillings says it’s up to the guests which path they choose.
Sensei’s core three-day retreat is a “Guided Wellness Experience.” For spa treatments, each guest checks into their own “Spa Hale,” a private 1,000-square-foot bungalow furnished with an infrared sauna, a steam shower, a soaking tub, and plunge pools. The latest therapies include Sarga Bodywalking—a barefoot myofascial release massage, and “Four Hands in Harmony,” a massage with two therapists working in tandem. Sensei Guides provide take-home plans so guests can continue their wellness journeys after the spa.
Sanctuaries for Longevity
Headquartered in Switzerland with hotels and on-site spas across the globe, Aman Resorts features an integrative approach, combining traditional remedies with modern medicine’s advanced technologies. Tucked behind the doors of the storied Crown Building in Midtown Manhattan, Banya Spa House at Aman New York—the brand’s flagship spa in the Western Hemisphere—is a 25,000-square-foot, three-floor urban oasis.
Yuki Kiyono, global head of health and wellness development at Aman, says the centre provides access to holistic and cutting-edge treatments benefiting physical, mental, emotional, spiritual, and social well-being. Aman’s customisable “Immersion Programs” consist of a three- or five-day immersion. “The programs encompass treatments and experiences that touch every significant aspect to create a path for longevity, from meditation and mindfulness to nutrition and movement,” Kiyono explains.
The spa’s “Tei-An Wellness Solution” features 90- to 150-minute sessions using massage, cryotherapy, and Vitamin IV infusions. Acupuncture is also on offer.
“With its rich history of Chinese Medicine, modern research, and the introduction of sophisticated electro-acupuncture medicine, acupuncture has been proven to assist with problems and increase performance,” Kiyono says.
Resetting the Mind and Body
Beyond longevity, “healthspan”—the number of years a person can live in good health free of chronic disease—is the cornerstone of Mountain Trek Health Reset Retreat’s program in British Columbia, Canada.
Kirk Shave, president and program director, and his team employ a holistic approach, using lifestyles in long-living Blue Zones as a point of reference.
“We improve our daily lifestyle habits, so we live vitally as long as we’re meant to live,” Shave says of the retreat. He built the program from an anthropological stance, referencing humans as farmers, hunters, and gatherers based on their eating and sleeping patterns. Food includes vegetable-centric meals sans alcohol, sugar, bread, or dairy.
Guests wake at dawn each day and have access to sunrise yoga, several hours of “flow” or slow hiking, spa treatments, forest bathing, calming crystal singing-bowl and sound therapy sessions, and classes on stress reduction—one of Mountain Trek’s primary goals. The program motivates people to spend much of their time in nature because it’s been proven to reduce cortisol, the stress hormone that can lead to inflammation and disease when elevated for extended periods.
While most guests aren’t aware of how immersive Mountain Trek’s program is when they arrive, they leave the resort revitalized after the structured, one-week program. Set in the Kootenays overlooking its eponymous river, the resort and adventure promise what Shave calls a “visceral experience of transformation.”
“They’re interested in coming to be in nature,” Shave says of the guests. “They hit a wall in their life and slipped backwards, so they know they need a reset.”
This article first appeared in the Winter 2024 issue of Mansion Global Experience Luxury.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’