Source: The Prof G Pod
The divergence between aggregate economic metrics (low unemployment, nominal wage growth) and individual financial anxiety reflects a real shift in household spending patterns—Americans are devoting larger shares of income to housing, healthcare, and childcare, leaving less discretionary cushion despite headline prosperity. This perception gap matters because consumer confidence drives spending behavior more reliably than GDP data does, and retailers dependent on discretionary purchases now face customers who feel financially constrained even when employment is stable. Housing, healthcare, and childcare are absorbing a larger share of income, squeezing discretionary spending in categories that drove growth in previous cycles.