Confidence Ekes Upward

The Conference Board Consumer Confidence Index rose modestly in July, signaling mixed sentiments among U.S. consumers. The index increased to 100.3 from a revised 97.8 in June. This uptick, however, masks underlying concerns. The Present Situation Index, which evaluates current business and labor market conditions, dropped to 133.6 from 135.3, indicating that consumers perceive the present economic situation as slightly deteriorating.

Conversely, the Expectations Index, reflecting consumers’ short-term outlook for income, business and labor market conditions, climbed to 78.2 from 72.8 in June. This figure remains below the 80-point mark, often viewed as a recession indicator.

Dana M. Peterson, chief economist at The Conference Board, highlighted that while confidence improved, it stayed within the limited range observed over the past two years.

“Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year,” Peterson noted.

In July, younger consumers under 35 and those 55 and older showed increased confidence, whereas the 35-54 age group exhibited a decline. Income groups displayed no clear trend, though those earning over $100K maintained the highest confidence on a six-month moving average basis, with a narrowing gap compared to other income groups.

Consumers’ assessment of the current labor market showed slight pessimism, with fewer respondents believing jobs were plentiful and more viewing them as hard to get. Short-term business conditions were seen more optimistically, with a higher percentage expecting improvement and fewer anticipating worsening conditions.

Inflation expectations held steady at 5.4% for the next 12 months, while expectations for rising interest rates fell to 50.3%. Notably, optimism about the stock market increased, with nearly half of the respondents expecting stock prices to rise.

Consumers reported plans to reduce spending on discretionary services such as gambling and personal travel, favoring less expensive options like streaming over movie outings. Despite these cutbacks, non-discretionary expenditures, including healthcare and motor vehicle services, remained priorities.

This month’s survey underscores the cautious optimism among consumers, tempered by ongoing economic challenges and uncertainties.

Or Is Sentiment Slipping?

Conversely, data from the University of Michigan’s Index of Consumer Sentiment show a decline. The findings reveal a 2.6% dip in July compared to the previous month and a 7.1% decrease compared to the previous year. The Index of Consumer Expectations, meanwhile, dropped 1.1% month over month but actually rose slightly — 0.7% — year over year.

“Consumer sentiment has remained virtually unchanged in the last three months. July’s reading was a statistically insignificant 1.8 index points below June, well under the margin of error,” the university’s Surveys of Consumers Director Joanne Hsu commented. “Sentiment has lifted 33% above the June 2022 historic low, but it remains guarded as high prices continue to drag down attitudes, particularly for those with lower incomes.”

The Bare Necessities

Indeed, lower-income consumers are seeing the vast majority of their earnings go toward covering their basic needs. PYMNTS Intelligence research reveals that consumers who make less than $50,000 annually spend 72% of their income each month covering food, monthly bills and housing, with the lion’s share going to the latter.

Furthermore, research from this month’s installment of the PYMNTS Intelligence study “New Reality Check: The Paycheck-to-Paycheck Report” reveals that roughly two-thirds of consumers live paycheck to paycheck, and nearly one in four consumers do so with issues paying their monthly bills.

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“The Last Transaction: Family Spending Habits Reveal Merchant Opportunities in Retail and Travel,” a PYMNTS Intelligence report, leverages data from a survey of over 2,700 U.S. consumers to analyze how retail and travel spending behaviors differ across various household types.

The results reveal that those who are married without children at home are spending the most on travel, and that spending has been the most resilient in the recent past. When surveyed this year, they said they had spent $620, on average, on travel services in the last month, down slightly from $634 last year but up considerably from $457 in 2022.

These figures were well above their single counterparts, who spent $246, $272 and $216, respectively. That is, for this year, single consumers without children at home are spending 60% less than their married counterparts.

Meanwhile, married consumers with children at home may not have the disposable income of their childless peers, having spent $326 on travel in the previous 30 days when surveyed this year, down from $361 in 2023 and $389 in 2022.

Single consumers with children at home spend the least on travel, perhaps because of the financial constraints that come with taking care of a family on just one income. They averaged $238, $257 and $290 in 2024, 2023 and 2022, respectively.

The Data in Context

Indeed, travel companies are feeling some of this pullback. On Thursday (July 25), American Airlines reported that, in spite of record second-quarter (Q2) revenue of $14.3 billion, net income nonetheless plummeted 46% to $717 million.

“Our current revenue performance is not where we want it to be,” CEO Robert Isom said. “We know we can do better, and we will rise to meet this challenge.”

Similarly, American Express shared on a call discussing its earnings released July 19 that, while travel and entertainment (T&E) spending rose 7%, there were areas of weakness.

“We did see some slower growth in certain T&E categories versus the prior quarter, such as in airline and lodging,” CFO Christophe Le Caillec said. “At the same time, growth in our largest T&E category restaurants remained strong.”

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By the Numbers

The recent PYMNTS Intelligence exclusive report “The Last Transaction: Family Spending Habits Reveal Merchant Opportunities in Retail and Travel” drew from a May survey of more than 2,700 U.S. consumers in conjunction with data from previous months to understand recent shifts in purchasing behaviors.

The results revealed that, at the time of the survey, consumers who are single with children in the household had spent, on average, $69 on retail products in the previous 30 days, down from $106 in April and $103 the month prior.

Meanwhile, among those who are married with children in the household, spending fell less in that month but more over a two-month period, averaging $90 in May versus $97 in April and $154 in March.

Those who do not have children in their household, meanwhile, have not shown the same downturn in spending. Consumers who are married without children at home had spent an average of $71 in the previous month in May, down slightly from $74 in April but up slightly from $70 in March. Those who are single without children at home averaged $90 when surveyed in May, up from $79 in April and $68 in March.

A Deeper Dive

In an effort to cater to these belt-tightening consumers, merchants are rolling out more generous deals. Walmart, for instance, recently had its “largest savings event ever,” Walmart Deals.

Plus, Amazon recently shared that it saw record-high participation in its Prime Day event, with outside reports noting that the company saw an 11% increase in spending over the two-day sale, reaching $14.2 billion.

“We love helping Prime members save money, and Prime Day is the ultimate celebration of the savings, selection, and convenience that Prime membership provides customers looking for shopping, entertainment, food delivery, and more,” Doug Herrington, CEO of Worldwide Amazon Stores, said in a statement.

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This insight emerges from the PYMNTS Intelligence report, “How The World Does Digital,” which dives deep into global generational habits, offering critical guidance for businesses shaping their digital strategies.

Generation Z, born between the mid-1990s and early 2010s, epitomizes seamless connectivity and digital immersion.

For these digital natives, social interaction flows effortlessly through platforms like Snapchat andTikTok, where messaging and social media are integral to their daily lives. Gen Zers consume entertainment avidly through video streaming and mobile gaming, while also embracing personalized digital shopping experiences. Though health apps are emerging, their focus remains on maintaining a dynamic digital lifestyle.

Gen Zers recorded the high mark for most activity days per month with an average of 93.8 in the “Have Fun” pillar. Their next two highest activity pillars are “Be Well” (57.8 days) and “Communicate” (53.8 days).

Millennials, spanning from the early 1980s to the mid-1990s, were the pioneers of widespread digital adoption. They pioneered digital banking and mobile finance, integrating these tools into their daily routines alongside ridesharing and online travel services. Their work and shopping habits have shifted decisively online, leveraging remote collaboration tools and eCommerce platforms for both professional and personal needs.

Despite their digital prowess, millennials maintain a balanced media diet that includes both streaming services and traditional media. Millennials also scored high in the “Have Fun” pillar with an average of 89.2 activity days per month. Their next two highest activity pillars were also “Be Well” (51.1 days) and “Communicate” (50.4 days).

Generation X, born from the mid-1960s to the early 1980s, approaches digital technology pragmatically.

Gen Xers are drawn to digital banking and increasingly turn to telemedicine and fitness apps for health management. Online platforms supplement their shopping and travel planning, blending convenience with established habits. Gen Xers engage with digital streaming while still holding onto traditional media, reflecting their practical and hybrid approach to entertainment.

Gen Xers had a little less fun but still recorded 67.9 activity days per month in the “Have Fun” pillar, followed by “Communicate” (37.6 days) and “Be Well” (29.5 days).

Baby boomers, born from the mid-1940s to the mid-1960s, engage with digital tools driven by necessity and convenience. They primarily use email for digital communication but are gradually adopting messaging apps and digital banking. Health and entertainment are increasingly digitalized, with telemedicine and streaming services becoming essential parts of their lifestyles.

eCommerce is gaining traction among this demographic, providing them with convenience and an expanded range of options. Health and entertainment are increasingly digitalized, with telemedicine and streaming services becoming essential parts of their lifestyles. For baby boomers, their highest activity pillar was “Have Fun” (42.2 days), followed by “Communicate” (25.9 days), and “Bank” (16.3 days).

Understanding these distinct engagement patterns across generations is crucial for businesses navigating today’s dynamic marketplace. By recognizing and adapting to these evolving digital behaviors, businesses can craft strategies that resonate effectively across all demographics, ensuring relevance and success in an increasingly digital world.

The study encompassed 11 countries representing a total population of 817 million, including major developed economies with robust digital infrastructure and emerging innovators like Brazil and Singapore. These nations collectively represented nearly half of global GDP in 2022.

Using third-party online panels, researchers ensured samples reflected each country’s demographics, targeting large cohorts in the U.S. and substantial groups in others. Quarterly surveys yielded sizable responses, enabling precise insights into digital activities across various demographics.

In 2023, more than 67,000 consumers participated, offering a comprehensive view across 11 key aspects of digital life, distilled from an initial 70 activities to 40 commonly engaged ones. The analysis gauged frequency of engagement, crucial for understanding digital adoption, but not easily comparable across categories or nations due to varying activity scales.

To address this, researchers estimated monthly engagement days for each activity, allowing for comprehensive summaries and an index measuring digital engagement. Results focused on adults aged 18-77 to ensure generational relevance. Overall, findings were weighted by population to ensure statistical validity, providing a nuanced perspective on global digital behaviors.

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PYMNTS Intelligence’s new study “The Last Transaction: Family Spending Habits Reveal Merchant Opportunities in Retail and Travel” sheds light on how inflation is reshaping the spending habits of families, especially those with children at home. This report, based on a May survey of more than 2,700 consumers, highlights three significant trends: the disparity in spending between households with and without children, the ways different kinds of households prioritize different retail purchases and the economic opportunity presented by empty nesters.

Disparity in Spending: Parents Versus Non-Parents

The data shows a stark contrast in spending behaviors between households with children and those without. Married parents with children at home typically have higher household incomes, with 62% reporting annual incomes of $100,000 or more. Still, their spending on both retail and travel has decreased significantly.

Married parents were found to be 36% more likely to complete a retail purchase in the last 30 days than single consumers without children at home. However, the average amount they spent on retail dropped from $147 in 2022 to $114 in 2024. This trend suggests that while parents still engage in retail activities, they are becoming more conscious of their budgets.

In terms of travel, married parents with children at home were 77% more likely to make a travel purchase recently than married couples without children. However, despite their higher likelihood of purchasing travel services, their spending per trip has decreased. The average amount consumers spent on travel services in the 30 days prior to being surveyed was down from $389 in 2022 to $326.

Product Preferences Across Different Household Types

Different household compositions exhibit distinct spending habits on various products. Married parents with children at home tend to allocate more of their budget to essential items and child-related expenses. For instance, 32% of these households recently purchased clothing and accessories, perhaps driven by the need to constantly update their children’s wardrobes.

They also show a higher propensity to buy consumer electronics and sporting goods, with 13% and 11% of their most recent transactions in these categories, respectively. These purchases may be influenced by the demands of modern family life, such as school supplies, gadgets for learning and recreational equipment.

In contrast, households without children prioritize different expenditures. They are likelier to spend on household goods, building materials and pet supplies.

Empty Nesters Fly the Coop

When it comes to travel, older consumers who are not responsible for paying any children’s way lead the pack in spending. Married baby boomers and seniors without children at home are spending an average of $754 on travel services, significantly more than any other group. This trend indicates that older, childless households are less affected by economic uncertainties and maintain higher travel budgets.

These households may benefit from stable, fixed incomes such as pensions and retirement savings, which are less vulnerable to economic fluctuations. Moreover, with fewer financial obligations like childcare or education costs, they may have more disposable income to allocate toward travel. This increased spending power could allow them to indulge in more frequent or luxurious travel experiences, highlighting a stark contrast in financial resilience and discretionary spending between them and younger families with children.

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By the Numbers

A PYMNTS Intelligence study in May for the “Last Transaction Report” series surveyed more than 2,700 United States consumers about their recent purchases. The results illuminated the generational trends in restaurant check sizes over time.

Back in March 2022, the earliest period included in the study, baby boomers and seniors were spending $33 on their average restaurant purchase, while Generation Z consumers were spending 30% more than that, $43. Yet by this past May, baby boomers and seniors were averaging a slightly higher $35, while Gen Z per-purchase spending dropped by 21% to $34.

In the same period, Generation X average spending per restaurant purchase decreased from $42 to $36, millennial spending dipped slightly from $44 to $42, and bridge millennial spending has fallen from $44 to $40.

The generational dynamics of restaurant spending have undergone a significant shift. After years of younger consumers leading the way in restaurant spending, there has been a notable decline in their average per-visit expenditure. Conversely, older consumers, specifically baby boomers and seniors, have increased their spending, narrowing the gap and in some cases surpassing younger generations.

A Deeper Dive

Notably, while younger generations may be spending less per visit, older consumers might be pulling back more overall, such that younger consumers’ overall restaurant spending may be decreasing less, even as average check decreases more.

A 2022 PYMNTS Intelligence study found that baby boomers and seniors are the most likely to purchase from restaurants less often in the face of inflation, while millennials and Gen Z consumers are the most likely to switch to restaurants with lower prices, and millennials and bridge millennials are the most likely to choose cheaper items from the menu and decrease the amount of food per order.

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This cohort, nestled between millennials and Generation Z, exhibits unique characteristics that set them apart from either more traditional generational grouping. The new PYMNTS Intelligence study, “Generation Zillennial: How They Shop,” draws from a survey of more than 3,600 U.S. consumers in May, digging into the nuances of different generations’ shopping behaviors. Here are five key takeaways from the report.

The Digital-First Shopper

Zillennials lead the charge in the shift toward online shopping. According to the study, 37% of zillennials prefer shopping exclusively online, a higher percentage than both non-zillennial Gen Z and millennials, who each sit at 34%, while for the overall population, it is just 33%.

For retailers looking to reach this growing demographic, this digital-first approach highlights the importance of optimizing merchants’ online presence and providing seamless eCommerce experiences to attract and retain this tech-savvy audience.

Straight From the Horse’s Mouth

Person-to-person recommendations are a key driver of purchasing decisions for zillennials. The report reveals that 39% of zillennials were influenced by recommendations from friends or family in the last month, versus just 30% of the overall population. This preference underscores the power of word-of-mouth marketing and the potential for leveraging customer reviews and testimonials to influence zillennial shoppers.

The Price Is Right

When choosing where to shop, zillennials prioritize price over brand selection. Forty-one percent of zillennials consider better pricing more important than brand availability, compared to 38% of the overall sample, while only 21% cares more about the brands they prefer.

Notably, zillennials are more polarized than the population overall, likelier to either prioritize brands or prices, with only 38% saying that both factors are equally important, versus 46% of the complete sample.

To Each Their Own

This polarization can be explained by the different kinds of zillennial shoppers. The study categorizes consumers in this generation into four distinct persona groups: budget-minded, wealth builders, free spenders and givers. Each group has unique shopping preferences and behaviors.

For example, 47% of zillennials are budget-minded, often seeking the best deals both online and in-person, making this far and away the most common mindset.

Meanwhile, 37% are wealth builders, prioritizing saving or invest extra money, and 10% are free spenders, who want to use extra money to buy or do something fun. The highest income but least common group, givers, averaging $106,000 annual household income and making up less than 4% of zillennials, would donate extra money to charities or gift it to friends or family.

The Omnichannel Advantage

While zillennials show a strong preference for online shopping, a significant portion also values a mix of online and in-person experiences. For example, 39% of budget-minded zillennials shop both online and in-store to find the best deals.

Meanwhile, givers are the likeliest to want to shop only online, while free spenders are more interested than other groups in shopping only in person.

Understanding the distinct shopping habits of zillennials, and of the different subcategories therein, is crucial for retailers looking to capture their growing spending power. Their preference for online shopping, reliance on person-to-person recommendations, and price sensitivity can suggest guidelines for developing effective retail strategies.

By acknowledging the diversity within the zillennial cohort and leveraging an omnichannel approach, retailers can better meet the needs of these discerning consumers.

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According to PYMNTS Intelligence’s recently released landmark report “How the World Does Digital,” this country with a population of 215 million has emerged as the global leader in digital engagement among its consumers.

The nation’s success in digital innovation is underscored by the widespread use of Pix, an instant-payment app launched by Brazil’s central bank in 2023. Additionally, the payment/eCommerce platform “Amazon of Latin America” — Mercado Libre — launched in Brazil in 1999 and is still in widespread use. This adoption is a testament to Brazil’s strong digital infrastructure, with two-thirds of consumers owning smartphones and 92% having access to at least a 4G network.

As the report shows, there are substantial variations in the degree of digital engagement for consumers in different countries based on the average number of activity days per month across the population. The study was based on responses from 67,000 consumers in 11 countries, collected through quarterly surveys in 2023.

The countries surveyed include the United States, the United Kingdom, France, Germany, Italy, the Netherlands, Spain, Australia, Japan, Singapore and Brazil. The sample sizes were statistically representative of the population in each country, considering gender, age, income and education.

To measure digital engagement, the report identified 40 core activities within 11 pillars of digital life, such as banking, shopping and entertainment. Respondents indicated their engagement frequency for these activities (daily, weekly, monthly or not at all). The results were then extrapolated to estimate the number of days consumers engaged in each activity per month. This allowed for a comprehensive comparison across different demographics and countries.

Brazil had the highest number of activity days, at 361 (12 activities per day). The U.K., which was the median country, had 276 activity days (9.2 activities per day) — 77% of Brazil’s score. Japan was the lowest, with just 127 activity days (4.2 activities per day) — barely one-third of Brazil and less than half of the U.K. There is a 234-day spread between Brazil and Japan and a 93-day spread between the second highest, Singapore, and the second from last, Germany.

The report found Brazil’s digital engagement spans various activities, as it did in other countries.

Video streaming tops the list, with 69% of consumers engaging in it at least weekly. Mobile banking follows closely, with 63.2% participation, and mobile gaming at 62.5%. Other popular activities include music streaming (60.8%), messaging (59.7%), online banking (59.4%) and active social media use (59.3%). Additionally, a significant portion of consumers engage in watching livestreams (58.2%), checking work remotely after hours (55.3%), and passive social media consumption (55.2%).

Generational and income dynamics further highlight the breadth of digital engagement in Brazil.

Millennials and Generation Z are the most digitally active, with 405 and 411 activity days per month, respectively. Generation X follows with 335 days, and baby boomers with 271 days. High-income earners lead with 456 activity days, compared to 363 for middle-income and 309 for low-income earners.

The digital engagement “winners,” based on total activity days, vary by generation.

French Gen Z users are the most active, with 464.8 activity days per month and about 15.5 activities per day. Millennials in the U.S. lead the entire generation in digital engagement, with 446.7 activity days and 14.9 activities per day. In Brazil, Gen X and baby boomers come out ahead of other countries.

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While more than two-thirds of students routinely use financial products and services, levels of financial literacy are too low to make sure they can avoid financial risks, the Organization for Economic Cooperation and Development (OECD) said Thursday (June 27).

“These results, combined with the increased incidence, complexity and potential impacts of financial frauds and scams, highlight the need to better equip our young people with the knowledge and skills necessary to make safe and informed financial decisions.” OECD Secretary-General Mathias Cormann said in a news release.

“We are keen to broaden the coverage of this assessment to help inform countries’ financial education policies and strategies with robust evidence, to ensure their education systems are as effective as they can be, including to prepare young people for their financial future.”

The OECD’s PISA 2022 Volume IV financial literacy assessment studied the financial skills of 15-year-olds in 14 OECD and six partner countries and economies and found that many of them engage in basic financial activities from a young age. 

For example, an average of 80% of students had purchased something online in the prior 12 months, while two-third had made a payment using a mobile phone. 

“However, many still lack the skills and knowledge needed to make sound financial decisions: nearly one out of five students on average in participating OECD countries and economies, did not achieve baseline proficiency levels in financial literacy,” the release said.

The best performing students — around 11% of those studied — were capable of solving non-routine financial problems and could discuss the potential outcomes of financial decisions, showing an understanding of things like income tax.

Research by PYMNTS Intelligence has shown that many consumers want more financial expertise, and often turn to financial institutions (FIs) for guidance. 

Research from PYMNTS Intelligence’s “How CUs Can Help Younger Consumers in a Distressed Economy” shows that nearly 60% of FI customers expect their financial institutions to help them improve their financial health.

The report, completed in collaboration with PSCU, now called Velera, found the need for financial advice is especially pronounced among younger consumers, with 29% of Generation Z consumers surveyed admitting they don’t know their credit scores.

“This may not be surprising, considering that 79% of Gen Z and millennials say they get their financial advice through social media,” PYMNTS wrote. “Only 11% say they use financial advisers to get the direction they need.”

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But it’s not just high earners pursuing extra cash. According to PYMNTS Intelligence’s “Tracking Consumer Use of Supplemental Income Sources,” 22% of all U.S. consumers work on the side to enhance their cash flow.

And although some might assume that those living paycheck to paycheck would be the ones most likely to work side gigs, the report — which is based on surveys with more than 4,200 U.S. consumers — reveals otherwise. Twenty-three percent of paycheck-to-paycheck Americans who say keeping up with their monthly bills is a challenge currently work side jobs, which is down from 29% who reported doing so last year.

Meanwhile, 26% of workers earning more than $100,000 per year tell PYMNTS Intelligence that they worked at least one side-job in recent months — the highest percentage among the three income groups we surveyed.

As the figure below illustrates, 22% of high-income consumers say they earned active supplemental income by working side gigs, reselling items, conducting informal tasks or peddling artisan products. Meanwhile 18% of those earning between $50,000 and $100,000 per year have found secondary sources of income in recent months, as have 16% or those earning less than $50,000 annually.

But 20% of those high-income earners also earn passive money, with profits from investments being their leading passive supplemental income source. Fourteen percent of high-income consumers told us they earned profits from investments around the time they were surveyed, while just 3.4% of low-income consumers had done so.

So how are consumers actively earning supplemental funds? Selling used goods is the most popular and accessible side hustle for consumers seeking additional cash flow. Thirty-one percent of all consumers say they have sold a used item in the last 12 months, while more than four in 10 have bought one used item this year. Age is a clearer differentiator than financial standing when it comes to reselling items, with the youngest consumers being the most involved in selling goods to make extra money.

Gen Z is the most likely to sell, as well as buy. Forty-seven percent have sold secondhand goods, and 74% have bought such items. When taking age out of the equation and looking only at paycheck-to-paycheck consumers who say they are struggling to pay bills, those shares drop to 37% selling and 49% buying such items.

As “Tracking Consumer Use of Supplemental Income Sources” concludes, although a slightly smaller percentage of U.S. consumers now live paycheck to paycheck compared to last year, more consumers are engaged with earning extra money on the side, but higher earnings alone do not preclude people from partaking in side hustles. In fact, affluent consumers appear to take some comfort in the financial cushion it offers.

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