Overview
- Federal Reserve Chair Jerome Powell cited anecdotal evidence that lower-income Americans are pulling back while higher earners keep spending.
- Company updates point to a bifurcated market, with McDonald’s reporting double-digit traffic declines among low-income diners as higher-income visits rose, and Procter & Gamble and Chipotle noting pressure on less affluent customers.
- Analysts warn a pause to SNAP benefits during the government funding standoff would create significant hardship for millions who rely on the program each month.
- Moody’s Analytics and Bank of America data indicate the top earners now account for an outsized share of consumer outlays, with higher-income wage growth around 4% year over year versus under 1% for lower-income workers and luxury spending up 8%.
- Economists and corporate trackers highlight rising auto-loan delinquencies, intense bargain hunting, and weakening consumer sentiment as signs of mounting strain on lower- and middle-income households.