American Consumers are Seemingly Bracing
A survey from Empower could point toward future recession.
As inflation lingers and economic signals flash mixed messages, American consumers are adjusting their behavior in subtle but significant ways. A growing undercurrent of recession anxiety is driven by high interest rates, political uncertainty, and global instability. This is beginning to ripple through household budgets and reshape spending patterns.
A recent survey from Empower found that 77% of Americans have changed their spending habits due to growing concerns about the economy. With 86% saying they feel the economy is unstable, that fear is starting to reshape household budgets and everyday decisions in meaningful ways.
Instead of dramatic cutbacks, consumers are adopting what economists call “pre-recession behavior”. This includes delaying nonessential purchases, avoiding credit card interest, and favoring fixed payment plans. Many are also building up cash reserves and improving their financial literacy. This could particularly be younger adults who’ve been associated with a lack of financial literacy and are now more cautious after years of economic volatility.
This shift may seem small, but it matters. Consumer spending makes up nearly 70% of U.S. GDP, and even subtle changes in how people shop or save can ripple across the economy. When large numbers of households start spending more carefully, businesses may begin to see slower sales, and in turn, pull back on hiring and investment. If this pattern holds, it could mark the start of a more sluggish growth phase. Economists often note that recessions aren’t just triggered by data but also driven by behavior. And right now, consumers are acting as if tougher times are ahead.