December U.S. Consumer Spending and Household Finances Charts

Consumer spending decreased in November, making it the fourth decline in the last five months. Following a slight increase in October, consumer spending adjusted for inflation declined by 6.0% from the previous month. All income groups reduced their spending, with low-income consumers becoming increasingly likely to trade down to cheaper alternatives.

After prioritizing experiences this summer, consumers have begun pulling back on some discretionary spending. Spending has declined for most discretionary services categories since their peaks in June and July. Gen Zers, who splurged earlier this year, have most sharply reduced their spending, particularly for recreation and apparel categories.

While a tight labor market has led to stronger incomes relative to a year ago, higher debt burdens for some could increase budgetary pressures. Inflation-adjusted incomes are above their year-ago levels for all income groups. At the same time, low earners, Gen Zers and student loan holders report debt rising faster than income. Seasonal trends pushed up credit card balances ahead of the holiday season, while a higher share of consumers, particularly parents and low-income adults, lean on “buy now, pay later” loans.

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