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If Debt Is Funding Most Spending, Can We Still Call the Consumer "Strong"?

capitalfolly.com

3 points by d_e_solomon 2 months ago · 1 comment

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d_e_solomonOP 2 months ago

We keep seeing headlines framing higher retail spending as a sign of economic resilience. But the mechanics behind that spending look very different today:

Unit volumes are declining

BNPL is growing in essential categories

Credit card rollover rates are rising

Savings buffers are shrinking

If the marginal dollar of “growth” is now debt-financed, is the metric still meaningful?

I’m curious how others see it. Is consumer spending still a valid indicator of economic strength, or should we be treating it as an obligation metric rather than a confidence metric?

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