Insight Flash: Consumer Edge data shows emerging weakness in affluent consumer segments could signal broader economic headwinds
With tariff talk continuing to dominate headlines, shoppers are becoming increasingly concerned about higher costs and their household budgets. However, while most discretionary categories have posted relatively soft performance throughout 2025, overall consumer spending is still holding up relatively well. The prevailing narrative has been that high-income consumers continue to prop up the U.S. economy, with their spending trends holding firm even as lower-income households feel most of the squeeze from inflation and general economic stress. Because this affluent segment accounts for a disproportionate share of total consumer spending, its resilience has been viewed as a critical stabilizer for broader economic performance.
However, Consumer Edge US consumer credit and debit card data is beginning to show signs that high-income consumers might be pulling back. In fact, early signs of relative weakness are emerging in several key subindustries where those consumers play a critical role – including full-service restaurants, home improvement, luxury goods, and airlines. If this trend persists, it could pose a significant risk to an economy heavily reliant on this group’s continued spending momentum.
Trading Down in Full-Service Restaurants
In Family Dining, the focus has been on the lower-income consumer. In its early May earnings conference call, Denny’s management described a more pronounced pullback among lower-income consumers, while Dine Brands (parent of IHOP) saw this cohort engage in “check management and trade down to lower priced items.” First Watch Restaurants noted that its higher-income customer profile provided some protection against economic headwinds. But since then, CE data points to a potentially concerning trend: high-income consumers are starting to pull back more. In the 35 days ended June 1st, year-over-year spend growth for diners earning $150k or more decelerated sharply at Family Dining restaurants, while trends remained steady for the $100k-$150k group and actually improved for those making under $100k.
Pressure on Big-Ticket Home Improvement Purchases
Leaders within Home Improvement have proactively signalled concerns related to high-income customers. During their Q1 earnings calls, executives at both Home Depot and Lowe’s noted that big-ticket projects are being pressured by the sustained higher interest rate environment. These large remodel and renovation projects, which carry an expensive price tag, are dependent on high-income shoppers with discretionary budgets. The latest CE data suggests that this pressure on big-ticket projects is worsening, with spend trends continuing to deteriorate for the highest-income shoppers as the year progresses. For the two most recent 35-day periods, CE data reveals that spend trends for shoppers making more than $150k underperformed all other cohorts.
Consumer Pull Back on Luxury Spending
Trends in luxury have taken a slightly different path. Following robust spend growth in the prior month – potentially boosted by pull-forward demand ahead of anticipated price hikes – high-income consumers pulled back spend on luxury (single brand) in the 35 days ended June 1st, underperforming middle and lower income shoppers by a significant margin. While the net effect of both of these dynamics has resulted in high-income shoppers performing in-line with other income cohorts, it signals a potential crack in the stability of high-income household spending on luxury goods, a potential troubling sign for an industry that has already been negatively impacted by a weaker aspirational shopper.
Travel Spending in Flux
Finally, as detailed in a recent Forbes Article citing CE data and insights, high-income flyers went from posting the most robust (yet still negative) bookings growth in April to the weakest in May, indicating that they might be starting to retrench on travel expenditures. If this troubling trend persists, that could be bad news for an industry that has depended on premium seating amid economic stress – for example, Delta’s CEO in April noted that “in a recessionary climate, premium demand has shown greater resilience compared to main cabin demand.”
The U.S. economy has long leaned on high-income households to sustain overall consumer momentum, especially as inflation and interest rates weigh more heavily on lower-income consumers. However, recent Consumer Edge data points to early but notable signs of retreat among these affluent shoppers across several influential categories—including dining, home improvement, luxury retail, and air travel. If this deceleration persists, it could pose a meaningful threat to industries that have come to rely on premium spending to offset broader softness. For business leaders and policymakers alike, the potential pullback of this vital consumer segment warrants close attention as a bellwether for the health and stability of the broader economic landscape.
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About the Authors
Jesse Waldvogel is the Director of Insights for the CEIC. Follow him on LinkedIn.
