Shoppers are powering the economy even as they balk at prices
- - Shoppers are powering the economy even as they balk at prices
MAX ZAHNDecember 24, 2025 at 7:02 PM
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Shoppers flexed their strength over a recent three-month stretch, powering the fastest quarterly U.S. economic growth in two years, federal government data this week showed.
Hours later, however, a widely read survey of shoppers struck a discordant note, registering a fifth consecutive month of declining consumer confidence in December. Consumers haven’t felt this glum since the immediate aftermath of "Liberation Day" tariffs in April, according to the Conference Board data.
The findings present a puzzle with high stakes for the nation’s economy as the calendar turns to 2026, some analysts said: Consumers continue to spend even as their attitude turns sour. The phenomenon resembles a so-called “vibecession” under President Joe Biden, when gloomy consumers stoked fears of a downturn but the economy hummed along as if paying little mind.
US economy grew more than expected in 3rd quarter
"The relationship between consumer feelings and behaviors has become less clear in recent years," Elizabeth Renter, senior economist at NerdWallet, told ABC News in a statement.
The U.S. economy grew at an annualized rate of 4.3% in the third quarter in the government's initial estimate, marking an acceleration from 3.8% growth recorded in the previous quarter, the U.S. Commerce Department said on Tuesday.
An acceleration of consumer spending helped propel the economic surge, the agency said. Consumer spending accounts for about two-thirds of U.S. economic activity. Shoppers opened up their wallets for services like health care, as well as goods such as recreational equipment and cars, according to the data.
"Just as they have for several years now, the U.S. consumer continues to carry the baton for the economy," Bret Kenwell, U.S. investment analyst at eToro, told ABC News in a statement.
In a social media post on Tuesday, Trump touted the economic data, citing in part "STRONG" consumer spending.
"The Trump Economic Golden Age is FULL steam ahead," Trump added.
Charly Triballeau/AFP via Getty Images - PHOTO: People shop for fruit in a grocery store in New York, Dec. 13, 2025.
Consumer attitudes appear to belie the robust underlying performance, however.
Most Americans say tariffs have worsened prices, the economy and their own financial situations, an ABC News/Washington Post/Ipsos poll found last month.
A measure of consumer sentiment from the University of Michigan finished this year at a level nearly 30% lower than where it stood in its final reading of 2024, fresh data last week showed.
On Tuesday, a separate survey of consumers issued by the Conference Board rated confidence at its lowest level since 2021, except for a dip at the onset of tariffs in April.
Some analysts attributed the gloomy consumer attitude to a sluggish labor market, which may heighten concern about an individual’s ability to retain work or earn a substantial raise.
Why are gold and silver prices hitting record highs?
"Consumer confidence deteriorated further in December as the labor market weakens and the outlook for 2026 remains uncertain. While spending activity held up into the fall, more households are cutting back in case income growth falters," Ben Ayers, a senior economist at insurance firm Nationwide Financial, told ABC News.
Still, some analysts acknowledged, the link between consumer sentiment and behavior is murky. On the whole, shoppers have continued to pay elevated prices, even as they balk at them. A cooldown of price increases last month offered a glimmer of hope, meanwhile, bringing inflation down to its lowest level since July.
"Should inflation and tariffs mellow out in 2026, consumer confidence should stabilize and eventually rebound -- that is, so long as the economy and labor market remain stable," Kenwell said.
Source: “AOL Money”
