Consumer Confidence vs. Actual Spending

There’s been a lot of buzz about low consumer confidence lately. But when you dig into the data, the story isn’t so gloomy. 

Yes, people say they’re worried about the economy – but their spending habits tell a different story. In fact, many Americans are buying more today than they did five years ago, even after you factor in inflation. That’s not just good news – that’s great news for dealers. 

Consumers Feel Cautious – But Keep Shopping 

A Federal Reserve-backed survey of nearly 10,000 U.S. households found that while incomes have gone up since 2019, a lot of people don’t feel better off. 

Why? Because most folks think prices have gone up more than they have – and they don’t always realize how much their income has grown. For example: 

• Around 62 percent of people experienced a 20 to 30 percent income increase, but less than 29 percent thought that was the case. 

• Meanwhile, 24 percent guessed they’d seen over 40 percent inflation, when in reality only 1.7 percent had. 

That mismatch between perception and reality? It explains a lot about why people are feeling cautious, even as they’re spending more. 

Sentiment Isn’t Slowing Sales 

Despite the noise, people are still shopping. And not just for groceries – they’re making big purchases too. Real spending (adjusted for inflation) is up across the board, even among households that say they’re worse off than they were in 2019. 

What’s driving that? Simple: people are adjusting. They’re finding deals, clipping coupons, switching stores, buying in bulk, and doing the legwork to stretch their dollars. Eight out of ten households reported making active changes to cut costs, and the more changes they made, the more likely they were to say they felt worse off. 

But here’s the kicker: even those shoppers are still buying. They’re just being more intentional about it. 

Behavior Beats Sentiment 

For years, we looked at consumer confidence as a predictor of shopping behavior. Not anymore. 

People may say they’re holding back, but when you check the receipts, they’re spending. They’re comparing, researching, weighing options, and ultimately making purchases when the value’s clear. 

• Only 14 percent said their income beats inflation, but verified purchase data shows that most people’s real spending power has grown. 

• Even those with flat or lower incomes are often buying more than they did pre-pandemic. 

Bottom line: it’s not about how confident shoppers feel – it’s about what they do. That’s where the opportunity is. 

Strong Automotive Helps You Stay Ahead 

While sentiment may be low, consumer activity is strong. And that’s what dealers should be paying attention to. 

At Strong Automotive, we stay focused on real-world behavior, not just the headlines. We track how shoppers are moving through the funnel, so we can help you build campaigns that meet them at the right moment with the right message.