The Consumer Sentiment vs. Consumer Spending Puzzle

Planet Money

Nov 21

Overview Shownote Highlights Transcript Chapters Pins

Shownote

Wherever consumer sentiment goes, consumer spending usually goes too. They’re like buddies that do everything together. Consumer sentiment wants a hair cut, its buddy consumer spending does too. But lately, these friends are drifting apart. While consume...

Highlights

Consumer sentiment and spending have long moved in tandem, but recent economic trends reveal a puzzling split. Even as people express growing pessimism about the economy, their wallets tell a different story—spending stays strong. This contradiction raises questions about what truly drives consumer behavior and whether current economic strength is as broad-based as it appears.

07:45

Credit card data covers about 80% of credit card balances in the U.S.

09:30

The wealthiest 20% were responsible for over half of credit card spending.

15:58

In a K-shaped economy, those at the top are doing better while those at the bottom are falling behind.

Chapters

Why Are People Gloomy But Still Spending?