Yes, but who and how varies.
This week, an email from the insights team at TD Cowen landed in my inbox with a subject line that stopped me in my tracks: “U.S. Consumer: The Reports of My Death Are Greatly Exaggerated.”
While I love a good Mark Twain quote (er, misquote), I couldn’t help wondering exactly what it had to do with consumers. Turns out, the impact of the doom and gloom we hear about the economy has a more nuanced effect on how many Americans choose to spend their money.
Yes, consumer sentiment is on the decline — the Conference Board’s Consumer Confidence Index dropped 0.8% in August, and the University of Michigan’s Surveys of Consumers reported a 6% decline month over month and an 11% drop from August 2025. And private payrolls only grew by 38,000 jobs in August — around 10,000 below economists’ expectations.
But Oscar Munoz at TD Securities — who sent me that eye-catching email — said all is not lost for 2026.
“Despite recent adverse spending, labor market, and confidence data, we continue to anticipate a resilient U.S. consumer in H2 2026,” he said in the email. “Corporate earnings still point to a two-track consumer: under pressure at the low end, but unfazed at the higher end.”
That echoes the sentiments I’ve heard from many in the casual industry over the past year — while other price points falter, the high end remains strong. That’s particularly true since tariffs have hit low-price imports hard enough to make them less of a value than they may have once been.
This sentiment also coincides with what our research arm — Consumer Insights Now — uncovered with its survey of high-income shoppers this year. That report found that consumers making $150,000 per year or more planned to purchase at least three home furnishings products this year, and 20% of them planned to buy outdoor furniture.
But just because they have money to spend, that doesn’t mean consumers at the high end are just blowing cash on anything. A recent report from BCG Consumer Insights found that 67% of consumers said they wouldn’t buy something they could afford if it didn’t offer “strong value.” While the word “value” may make you think price, think again — BCG found that quality was the biggest driver for perceived value, followed by price and promotions.
That coincides with Consumer Insights Now’s findings that 90% of higher-income shoppers are willing to pay more for quality furnishings, and that ticks up to 95% for those making $200,000 per year or more, as well as for baby boomers.
And in case you need any more proof, another report released this year from Small Business Expo found that quality and personal service were the top things valued by consumers, far outpacing brand reputation, low price and convenience as priorities.
So, what’s the takeaway here? Yes, the economy is struggling a bit now with inflation, slower job growth and continuing pressure from tariffs, geopolitical conflicts and other factors. That’s certainly hitting a lot of folks in the wallet, forcing them to tighten the budget and maybe forgo that big-ticket discretionary spend for new patio furniture until things calm down a bit.
But there’s also a solid number of consumers — more than a quarter of U.S. households earn $150,000 per year or more, according to U.S. Census data — who do have money to spend on upgrading their homes. To reach them, telling that quality story of craftsmanship, durability and luxury, and backing it up with that same level of quality in customer service, is more important than ever. Arming them with the information about materials, how furnishings are made and how long they will last helps these consumers see the true value behind the price tag, reminding them that the investment in quality outdoor furnishings will last far longer than any economic downturn.
