Consumers: Optimistic yet Cautious

Rising consumer optimism generally has a positive impact on spending. But now we are seeing this divergence between the decline in real retail spending and the reported optimism among US consumers. While rising optimism can be a positive indicator for future spending, it doesn't necessarily guarantee immediate spending growth or rule out the possibility of consumers becoming more cautious in the near term.

If consumers are feeling optimistic despite the decline in retail spending, I see this as an indication that they have confidence in the overall economy or expect improvements in the near future. This positive sentiment might translate into increased spending over time as consumers become more willing to make purchases.

However, it's also possible that consumers could choose to be more cautious and tighten their spending in response to the decline in retail spending. They may prioritize saving or reducing debt rather than engaging in immediate consumption. This is where we tend to see growth in Buy Now Pay Later model - shoppers prioritizing reducing their debt while being able to spread out payments interest-free, all while building credit.

Charlie Youakim

CEO and cofounder, Sezzle


Optimistic yet Cautious