The Sentiment-Spending Disconnect
Consumer confidence surveys paint a bleak picture. Americans say they’re worried about the economy. They’re pessimistic about the future. They’re anxious about their finances.
Yet actual spending tells a completely different story.
Understanding this gap—the “Teflon Consumer” phenomenon—is essential for retail property investors.
The Data Contradiction
The numbers don’t match the mood. The Conference Board’s expectations index has dropped to levels that historically signal recession. Consumers tell pollsters they’re struggling and expect things to get worse.
But real discretionary spending? It’s grown 3%+ year-over-year. That’s robust by any measure.
Why Consumers Say One Thing and Do Another
Three factors explain this disconnect:
Jobs remain strong. Unemployment at 5.5% means 94.5% of workers are employed. Wage gains have been solid. People with paychecks spend them—no matter what they tell pollsters.
Wealth effects add up. Stock gains and home equity appreciation have enriched households, especially higher-income ones. This offsets some of inflation’s bite.
Adaptation takes hold. Consumers have adjusted to higher prices. What once felt outrageous now feels normal. The sticker shock has faded.
What This Means for Landlords
Don’t let gloomy surveys scare you away from solid properties. Headlines don’t match parking lot activity.
Focus on real data: tenant sales, foot traffic counts, and transaction volumes. These matter more than confidence surveys.
One caution: the Teflon coating isn’t even. High-income shoppers are genuinely resilient. Middle and lower-income consumers face more pressure.
Action Steps
- Track credit metrics. Rising credit card delinquencies and auto loan defaults signal cracks in consumer strength.
- Review tenant sales in your portfolio. We’ll help you identify which trade areas have Teflon consumers—and which don’t.
Contact us: (213) 880-8107 | francisco.williams@williamscap.ai | williamscapitaladvisors.com
