Consumers Feel Awful But Keep Spending with Mastercard's Chief Economist Michelle Meyer

6 snips

Oct 5, 2026

Michelle Meyer, Mastercard’s chief economist and a leading analyst of consumer behavior, returns to examine why Americans keep spending despite gloomy sentiment and mortgage rates above 7%. She discusses the K-shaped economy, wages versus inflation, diesel prices, Mastercard’s holiday forecast, and how AI is changing shopping habits. She also previews the labor-market signals and AI investment trends shaping the 2027 outlook.

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INSIGHT

Why High Rates Do Not Hit Every Consumer Equally

Interest rates affect households unevenly rather than uniformly.
New buyers face mortgage costs above 7%, while fixed-rate borrowers near 2.5%–3% benefit from rising asset and savings returns.

INSIGHT

The Labor Market Keeps Consumer Spending Strong

Labor-market health, not interest rates alone, remains the primary driver of consumer spending.
Construction, infrastructure, AI investment, and manufacturing are broadening job creation beyond traditional service sectors.

INSIGHT

Holiday Spending Growth Is Half Real Volume

Mastercard forecasts 5.5% holiday spending growth excluding autos and gas, the strongest pace in four years.
Inflation explains roughly half the increase, leaving the other half as genuine volume growth.

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Guy Adami welcomes back Michelle Meyer, Chief Economist at Mastercard, to dig into what Mastercard's data is saying about the American consumer heading into the holiday season. With mortgage rates above 7% and sentiment surveys still gloomy, Michelle explains why spending keeps holding up. The answer is a healthy labor market, strong household balance sheets, and a K-shaped economy where upper-income households are spending faster but every income group is still growing. She breaks down Mastercard's forecast for 5.5% holiday spending growth (excluding autos and gas), the strongest in four years, and how much of that is real volume versus inflation. They also discuss why real wages are sitting right on the line and why diesel prices are worth watching. Michelle shares new research showing that AI power users shop across more merchants and start their holiday buying earlier. The conversation closes with what to watch in the labor market and a preview of Mastercard's 2027 outlook, coming in early December. Michelle's holiday forecast report is linked in the show notes.

Show Notes

Holiday 2026: AI assists and last-minute lists (MasterCard Economics Institute)

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