Americans’ Pessimistic View of the Economy Doesn’t Stop Them from Spending

The latest data from the National Retail Federation (NRF) paints a striking picture: while Americans are feeling unusually gloomy about the economy, their wallets are still open and active.

Sentiment vs. Spending: A Contradiction in Motion

According to the NRF, core retail sales (which exclude restaurants, bars, gasoline stations and automobile dealerships) increased by 0.6 % month-over-month in October — rebounding from a 0.5 % drop in September.
At the same time, the longstanding survey by the University of Michigan shows current U.S. economic conditions receiving the harshest rating in its 73-year history.

In short: consumers feel bleak about the economy — but they keep spending. The NRF sums it up: consumers “have the ability to do two things at once: they expressed very low sentiment, but yet they drive the economy forward with spending and aggressive participation in commerce.”

Why This Disconnect?

Several factors help explain why consumers continue to shop despite the negative outlook:

• Prioritisation of family, tradition and experiences. The NRF notes that even vulnerable groups may cut back in some areas, but still aim to maintain traditions, gift-giving and big meals.
• Strong asset markets for some. For those with exposure to stocks or other investments, that may support spending. The NRF points to this as one driver.
• Flexible trade-offs. Chief economist at the NRF, Mark Mathews, observes: “If consumers are having to pay more for goods, they’re going to make savings elsewhere.” In other words: cut back in one area to preserve spending in another.

Holiday Outlook and Broader Implications

The NRF is forecasting that holiday spending this season will surpass $1 trillion for the first time. Meanwhile, e-commerce platform Shopify reported that “shoppers keep buying… demand remains really resilient.”

For businesses and policymakers, the message is clear: consumer mood isn’t the only indicator of spending behaviour. Even with weak sentiment, underlying factors (jobs, asset wealth, social norms) can sustain consumption.

Key Takeaways for Stakeholders

• Retailers should plan for resilient demand — even if consumers talk down the economy, they might still buy.
• Marketers might lean into the emotional dimension (tradition, gifting, social connections) rather than pure economic optimism.
• Policy-makers need to understand that sentiment surveys may not immediately translate into spending downturns — but persistent negative mood could weigh on future behaviour.
• Consumers themselves might reflect on how they balance perception and reality: feeling uneasy about the economy but still choosing to spend should prompt a review of priorities, savings and long-term financial health.