Consumer confidence is collapsing, but spending is strong

The mood among consumers is bleak, but that’s not stopping many Americans from spending money. While the Conference Board Consumer Confidence Index for January dropped to its lowest level since 2014—respondents cited everything from inflation and oil prices to trade politics and health insurance—a slew of indicators from credit card data to iPhone sales show resilience among shoppers.

Mastercard and American Express both had positive things to say about US consumers.

“We remain positive about the growth outlook and our base case for 2026 continues to reflect healthy consumer spending,” CFO Sachin Mehra told shareholders.

CEO Michael Miebach added that in 2025 the company saw a “truly savvy and intentional consumer” taking advantage of the digital economy to find the best deals and using loyalty programs to determine their spending decisions.

As for the much-feared tariff impact, it’s just showing up in the numbers: “Somewhere across the ecosystem between importers and big brands, it’s all been adjusted in a way that it hasn’t really affected consumer spending,” Miebach said, adding that these positive trends continued into January.

American Express is similarly seeing healthy spending, especially on the part of younger and affluent shoppers. The company said that while overall retail spending increased 10%, spending at luxury retail merchants was up 15%. It also noted that millennial and Gen Z customers comprise the largest and fastest-growing shares of US consumer spending.

Meanwhile, many of these shoppers also appear to be buying iPhones.

“The demand for iPhone was simply staggering with revenue growing 23% year over year and all-time records across every geographic segment,” CEO Tim Cook said in the company’s Q4 earnings call.

Apple’s products revenue hit an all-time record of $113.7 billion, up 16% YoY, fueled mainly by sales of the iPhone 17.

Even at the highest level, consumer spending was a major driver of the 4.4% increase in US GDP in the third quarter of 2025. Personal consumption expenditures were up 3.5% for the period, per the latest government data.