December 8, 2025

Hi, everyone. This is Taylor St. Germain with ITR Economics. Thanks so much for joining me on this episode of TrendsTalk. We had ITR, your apolitical and unbiased source of economic intelligence. And today I wanted to check in on the consumer. Big part of our economy, about two-thirds of GDP is consumer spending, so understanding how that consumer is doing is very important.

I wanted to first highlight by saying overall, we see that the consumer continues to spend and is in a relatively healthy position. Now, there are some areas that have some calls for concerns, but overall, we are expecting the consumer to be a big part of the growth story in 2026. So I wanted to highlight a few data sets that I’m paying attention to that will give you a little bit of insight on how the consumer is faring. I wanted to first start off with some weekly data, and this comes from the Johnson Redbook data. Overall, if you look at this Johnson Redbook data on consumer spending, it shows that total consumer spending is up about 5.9% over the course of the last week. Now, that’s very encouraging because it shows not only is our consumer spending, but our consumer spending above the rate of inflation, which is a very key metric. Of course, we get the question all the time, are we in a period of stagflation? And the answer for me is no. And, you know, a key part of that is the fact that our consumers are spending above the rate of inflation. Now, if we look at discount store spending, that’s up 6.3%, also a very healthy metric. The one area I will highlight that’s a little bit weaker over this last week has been department stores, which is down 1%. It’s not all that unusual in these post-COVID times to see department store spending down, however. So yes, it’s something we’re watching, but it’s not something I’m losing sleep over at this point in time. And again, the real important metric is that overall spending is up 5.9%.

Now, I always love to check in on delinquency rates because we need to have a good understanding of, well, are we paying our credit cards? Are we paying our consumer loans? Are we seeing delinquencies rising? We have since seen delinquency rates for credit cards and consumer loans level off. Credit card delinquency rates are about 3.1% and consumer loan delinquency rates are at about 2.8%. Just to give you a reference point, back during the financial crisis of 2008, 2009, we saw that credit card delinquency rate sitting up at about 6.5%. So the fact that we’re only at 3.1% today highlights we’re nowhere close to those concerning levels that we saw in 2008, 2009. And again, it’s a similar story when we look at consumer loans, only up 2.8%. In 2008, 2009, they were up closer to 4.8%. And I would also add to that, our real estate loan delinquency rate is at a very significant low. The last time we actually saw it this low was in 2004, but it’s only sitting here at 1.8%. And again, to give you a reference point in 08, 09, during the financial crisis, that was up 10.9%. So we are paying our residential loans. We don’t see any concerns from a delinquency rate standpoint there either. The one area of delinquency rates I will highlight a little bit of concern is the automotive market. And for those of you that follow the Trends Report, you will know that North America Light Vehicle Production is in a recession. We are seeing that contract year-over-year. And we do see auto delinquency rates sitting here at 5%. Now, again, I’ll give you the financial crisis reference point, which was 5.1%. So overall, our consumers are spending. We’re handling most of these delinquency rates, but keep your eye on the automotive market. Has us a little bit concerned.

I’ll give you another positive point just to finish off the consumer perspective here. We look at the share of consumer credit card accounts making the full balance payment. That is at 35.6%. The only time we saw that slightly higher was coming out of the pandemic. So we have a number of individuals in this country paying the full balance on their credit cards. It’s a higher proportion than normal, which also gives us a lot of comfort that we are seeing the consumer handling some of their debt and in a relatively strong position as we move into 2026. As is the case with economics, there’s no such thing as all good or all bad. Our outlook has not changed for the second half of the decade, which is we expect increasing consumer spending. We are expecting GDP to grow all the way through the end of 2029. And that, of course, leads into the next downturn, which we have coming our way in 2030.

And for those of you that are interested in learning more about that 2030 downturn, one of our colleagues and economists, Lauren Baker, will be hosting a 2030 Great Depression webinar with our chief economist, Brian Beaulieu. That’ll be coming here in December. I’ve discussed the 2030s in the past, but of course, I want you all to hear directly from Lauren, one of our key speakers, and Brian, our chief economist, on how to take advantage of the next five years and best position yourself for the 2030s.

In the meantime, there’s still a lot of growth out there we’re preparing for in 2026. Thanks for joining me on this episode of TrendsTalk. Please like and subscribe to TrendsTalk wherever you listen to your podcasts. And I look forward to seeing you all in the next one. Thanks so much. Take care for now.