Eurodollar University The Consumer Recession Is Already Here (Chipotle Just Confirmed It)
Oct 31, 2025
Fed Chair Powell's reluctance to commit to a rate cut stems from differing views on the labor market's strength. Chipotle and Kraft Heinz raise alarms about consumer pullback, particularly among younger generations. As incomes drop, discretionary spending on dining out diminishes. A recent report highlights consumers planning to cut back on holiday spending, and retailers show signs of weakness by hesitating to hire seasonal workers. Meanwhile, uncertainty remains as Fed officials seek more evidence of economic struggles before adjusting their stance.
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Consumer Weakness Contradicts Market Euphoria
- Chipotle and Kraft Heinz warn that consumer weakness is widespread and hitting younger cohorts hard.
- This consumer pullback contradicts the stock-market narrative of a booming economy.
Chipotle’s Customer Pullback Example
- Chipotle reported a broad pullback in visit frequency, with lower-income households cutting back most.
- CEO Scott Boatwright said millennials and Gen Z are particularly challenged by unemployment and student debt.
Jobs And Incomes Drive Consumer Pullback
- Falling jobs and incomes, not just inflation, explain why consumers cut discretionary spending like eating out.
- Even FOMC members who favor a cut privately want more proof the labor weakness is real.