The consumer everyone says is miserable just posted 6.1% spending growth and the fastest projected holiday season since 2022. But the funding source is the story.
Spending is outrunning income. The savings rate dropped to 4.1% — half its pre-pandemic level. Debt is at record highs. People are funding their lifestyle with savings, credit, and stock gains, not bigger paychecks.
One line says it all: Americans are spending their financial condition, not their psyche. Sentiment is near a record low. Spending is near a high. The two have fully decoupled.
Here's the tell: Sentiment rose for the Americans who own the most stocks and fell for those who own none. A 32% $SPY run since May 2025 is doing the spending. That's the wealth effect — and the wealth effect is a two-way door.
Savings run out. Credit hits a limit. Stock gains reverse. All three props under this consumer are either finite or market-dependent.
The consumer isn't breaking. It's borrowing against the future and leaning on a bull market. Strong until two of the three run dry.
Spending is outrunning income. The savings rate dropped to 4.1% — half its pre-pandemic level. Debt is at record highs. People are funding their lifestyle with savings, credit, and stock gains, not bigger paychecks.
One line says it all: Americans are spending their financial condition, not their psyche. Sentiment is near a record low. Spending is near a high. The two have fully decoupled.
Here's the tell: Sentiment rose for the Americans who own the most stocks and fell for those who own none. A 32% $SPY run since May 2025 is doing the spending. That's the wealth effect — and the wealth effect is a two-way door.
Savings run out. Credit hits a limit. Stock gains reverse. All three props under this consumer are either finite or market-dependent.
The consumer isn't breaking. It's borrowing against the future and leaning on a bull market. Strong until two of the three run dry.
