After an economic slowdown in the first quarter, the chances of the economy witnessing a further decline has increased with surging inflation. The consumer price index rose 8.3% year-over-year in April, beating the 8.1% estimate. Since this indicates a more hawkish Fed going forward, many analysts fear the economy will slip into recession because of uncomfortably high interest rates.
Therefore, the consumer staples sector could be one of the best investments now. The almost inelastic demand of products in this sector allows it to perform steadily in all business cycles. Investors’ interest in consumer staples stocks is evident in the First Trust Consumer Staples AlphaDEX ETF’s (FXG) 12.5% returns year-to-date versus the SPDR S&P 500 Trust ETF’s (SPY) 11.5% loss.
