American consumers have been in a sour mood lately, as measured by the University of Michigan Consumer Sentiment Survey and the Conference Board’s Consumer Confidence Index.
Worried consumers doesn’t mean they aren’t spending though. The Wall Street Journal’s Chao Deng explains:
Weak readings don’t mean Americans aren’t spending, or that the economy is stalling. Retailers from Walmart to T.J. Maxx have reported signs of a solid holiday shopping season. Big stock-market investors are much more positive about the economy.
Still, less-affluent households have been pulling back on routine purchases to give priority to things they need sooner, while upper- and middle-income consumers race ahead. And retail-sales growth has cooled amid concerns about tariffs affecting prices.
The survey also continues to show a wide gap in how people feel based on party affiliation, with participants who identify as Republicans showing significantly higher sentiment than Democrats or Independents. Democrats felt better than Republicans when Joe Biden was president.
Action Line: Americans are crying and buying. Unhappy about the economy, but still spending their money like they’ve got it. The deep differences in partisan responses to the surveys suggest the unhappiness some feel is more about sour grapes than economic woe. Meanwhile, the fairly wealthy people I talk to each day are saving til it hurts because they want to enjoy their retirement life. When you want to talk about your retirement plan, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my monthly Survive and Thrive letter. It’s free, so you don’t have to feel bad about it.
