Fed Data Shows Consumers Shift Spending Toward Homes and Vacations
Consumer spending shifts toward homes and vacations as savings gaps widen
In brief
Consumer spending shifts toward homes and vacations as savings gaps widen Lower-paid workers drive $1.7 trillion in spending but face financial strain Originally reported by Pymnts.
Spending Growth Slows
August household spending growth slowed to 4.7% year-over-year from 4.9% in December 2025
Spending Mix Shifts
More households bought furniture, home repairs, homes and vacations in August than in April
Expectations Rise
Households expect total spending to grow 3.6% next year, up from 3.4% in April
Savings Gaps
81% of paycheck-to-paycheck households who recently struggled had previously paid bills without difficulty
Savings Buffer
62% of financially improved paycheck-to-paycheck households had more than three months savings
Wage to Wallet
60 million workers earning $25 or less per hour generate $1.7 trillion in annual spending
Credit Strain
35% of struggling households carry credit card balances for emergencies
The headline
Lower-paid workers drive $1.7 trillion in spending but face financial strain
