American consumers are miserable. But they keep spending

Subscribe to enjoy similar stories. This weekend America will once again be plunged into a frenzy of consumerism as retailers bombard shoppers with “Black Friday" and “Cyber Monday" sales. Even more than usual, bosses will be nervously watching the extent to which Americans are willing to empty their wallets.

This month the University of Michigan’s gauge of consumer sentiment fell to only just above its level in June 2022, when the index reached its lowest point since tracking began in 1952 (see chart, top panel). Americans on the whole are feeling dejected about their job prospects and nervous about inflation. As a result, they are telling pollsters that they plan to cut back on spending.

In practice, however, they have been doing the opposite. On November 25th America’s Census Bureau released figures showing that spending at retailers and restaurants in September was up by 1% year on year, adjusting for inflation, hardly suggesting that consumers are tightening their belts (see chart, bottom panel). Businesses are struggling to gauge how long the mismatch between the gloominess of shoppers and the resilience of their spending can continue.

For now, they have reasons to remain optimistic. Figures on consumer sentiment treat rich and poor Americans alike. Yet their spending differs greatly.

Despite recent wobbles, America’s stockmarket remains lofty, helping to boost consumption by the share-owning wealthy. For LVMH, the world’s largest purveyor of luxury goods, sales in America in the three months from July to September were up by 3% compared with the same period in 2024, having fallen in the first half of the year. Unilever, a consumer-goods giant, said that premium products fuelled its sales growth in America in the