Notes on the Week Ahead The Health of the Consumer
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Nov 24, 2025 The discussion opens with a striking metaphor on athlete health versus consumer well-being. Insights predict a recovery in consumer spending by 2026, even amidst current economic struggles. Recent spending trends reveal mixed signals across various sectors. Real disposable income emerges as a crucial factor influenced by wages and inflation. Deeply depressed consumer confidence also poses challenges. The impact of wealth effects favors upper-income households, while demographic shifts threaten housing demand. Closing thoughts guide investors on navigating weak consumer landscapes.
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Battered Lineman Illustrates Hidden Fragility
- David Kelly describes a battered football lineman mischaracterized as "healthy" by commentators.
- The image illustrates how surface appearances can mask deep consumer health problems.
Consumers Likely To Recover But Remain Fragile
- Kelly expects U.S. consumers to rebound in 2026 despite underlying weaknesses.
- He warns aggregate consumer health remains poor and spending growth will be slow and fragile.
Auto Sales Show Cooling Momentum
- Auto sales rose in Q3 but softened into October and November, partly after EV tax credit expirations.
- Auto demand looks subdued heading into year-end, signaling cooling big-ticket purchases.