Thriftiness is back in style

Recent data shows US consumers are tightening their belts—and not just so jeans fit better.

Impulse buys and spontaneous weekend trips are giving way to grocery lists, coupon codes, and home-cooked meals where every ingredient counts, according to a slew of recent reports.

• Consumer spending stalled in the first half of 2025, especially among middle- and lower-income Americans, according to the Bureau of Economic Analysis.
• The CEOs of Chipotle, Kroger, Proctor & Gamble, Mondelez International, and others have reported that their US customers appear more strapped for cash compared to previous years.
• Credit card balances for Americans earning under $120,000/year recently surpassed pre‑2019 levels, following a yearslong decline analysts tie to pandemic-related gov’t assistance.
• Fast-casual restaurants like Sweetgreen, Cava, and Wingstop have seen sales and foot traffic slow in recent months, a trend largely attributed to more cost-conscious consumers.

What’s going on?

Many lower-income US consumers are dialing back spending and focusing on essentials due to various worries about the future, according to company executives and analysts. These include concerns about rising inflation, job uncertainty, and how the White House’s new tariff or immigration policies will filter down to consumers.

At the same time, recent data shows increased spending among wealthier Americans is helping to prop up the US economy.

• The top 20% of earners now make up over half of all consumer spending, according to Moody's, while a recent Boston Fed analysis found strong spending among Americans earning $120,000+ is helping to mask rising debt levels and slower spending growth for other consumers.

Looking ahead…The health of US consumers will become clearer in the coming weeks as new tariffs take effect, and the Federal Reserve considers an upcoming interest rate cut. Companies have mostly borne the brunt of increased US tariffs so far—but that trend likely won’t last for long, according to Goldman Sachs, which projects the burden will increasingly be passed on to consumers in the near future.