Consumer spending is often described as the engine of the U.S. economy. It accounts for roughly 70 percent of the country’s gross domestic product (GDP), making it a powerful force in shaping economic growth. In the years following the COVID-19 pandemic, the nature of consumer spending has shifted in significant ways—reshaping industries, influencing inflation, and playing a major role in the country’s uneven recovery. What do professionals say? Here are the thoughts of pros like Kavan Choksi / カヴァン・ チョクシ.
At the height of the pandemic, spending patterns changed dramatically. Travel, dining, and in-person shopping plummeted as lockdowns and health concerns took over. In their place, people spent more on home goods, digital services, fitness equipment, and food delivery. At the same time, many households increased savings due to reduced daily expenses and government stimulus payments.
As the economy reopened, spending bounced back but not in the same way it existed before. Pent-up demand led to a boom in services like tourism, entertainment, and restaurants. Retailers saw surges in spending, often leading to shortages and delays. This rapid return of consumer demand, paired with supply chain bottlenecks, helped fuel the sharp rise in inflation that followed.
Now, a few years on, consumer behavior continues to evolve. Shoppers are more cautious than they were in 2021 and 2022, particularly as inflation has raised the price of everyday goods. Essentials like groceries, housing, and energy still take up a growing share of many families’ budgets. As a result, discretionary spending on items like electronics, fashion, and entertainment is beginning to soften, especially among lower-income households.
At the same time, a shift toward “value-driven” consumption is underway. Consumers are looking for deals, switching brands, and becoming more strategic in how they spend their money. Discount retailers and second-hand marketplaces have gained popularity. Digital tools, such as price comparison apps and cashback platforms, are also influencing purchasing decisions.
Credit use is another key trend to watch. As savings built up during the pandemic are depleted, more people are turning to credit cards or buy-now-pay-later options to cover expenses. Credit card balances in the U.S. have risen to record highs, and interest payments are becoming a bigger burden, especially as the Federal Reserve has raised interest rates. This could weigh down future spending if households start to cut back to manage debt.
Consumer sentiment also matters. Even when job growth remains steady, people tend to reduce spending if they’re uncertain about the economy or their personal finances. High prices, housing insecurity, and student debt repayments can all contribute to a sense of financial stress, making consumers more cautious in the long run.
In summary, consumer spending has been a driving force behind the post-pandemic economic recovery, but it’s now entering a more complex phase. With inflation still high, credit becoming more expensive, and economic uncertainty looming, spending habits are changing once again. These shifts will continue to shape the direction of the U.S. economy in the months ahead. Businesses, policymakers, and investors are all watching closely to see what consumers do next.
