Economy at a Yellow Light? 🚦

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We all know that feeling when we approach a traffic light and all of a sudden it turns yellow, we have a split second to decide, do we speed up to make the light, or do we slow down and kind of play it safe?

That's exactly what I'm seeing in our consumer data. Consumers aren't panicked, but they're not necessarily speeding ahead. They're hesitating, and why leaders need to know about this is when large groups of people have significant shifts. What happens next determines if things will accelerate or if they will stop.

Every month, I ask consumers how they're feeling about the economy. Are they "spending as usual" - which is our green group. Are they "pausing and spending less," the yellow. And then are they anxious, and so much that they pretty much "stopped their spending," red. And the gap between the spending and not spending is a forward look into how people are feeling.

So in December, what happened? We actually saw a shift from the green spending as usual, three points, and that moved into this pause and hesitation. The good news is the red group, the anxious and very anxious, stayed flat. But the unintended consequences is that the gap between that green group and the red group actually grew to 12 points. That actually shows there's a little bit of tension that is building that isn't quite resolved.

So who's driving this change? Pun intended. The three groups that are actually showing the most significant increase into this pause spending less are Gen Z, Hispanics, and households making $50,000 to $100,000. All of these groups showed a 10 point increase of people in that yellow zone. Now the good news is they're not all the way into the red group, which is the stop, they've stopped spending all together.

But this pause is a is a pretty important note, because this is a large group of individuals that actually usually has hope and energy and optimism, and the fact that so many have moved into the yellow is this idea of recalibration, reassessing, and they're deciding whether they really need to slow down or move forward with their spending.

So what's the? So what, now what?

We track 30 different business verticals, and I can tell that it is not just restaurant behaviors declining. In fact, they were pretty steady November to December. What I did see is a little dip down in movies in November and December.

We'll unpack a lot of this in our next virtual lunch and learn that what we're going to be evaluating is, you know, these groups of people, are they going to stay on yellow and kind of pause? Are they going to tap the accelerator and move back into green, or tap the brakes and move down into the red?

And if you haven't signed up already, we have close to 250 people that have registered. We're going to unpack the key trends and counter trends to make 2026 the best year ever, and have the insights to become your competitive advantage. Scroll down below and check it out and sign up. You won't want to miss it. Until next time.

If this content is interesting and you want to dig further, we're hosting a virtual Lunch and Learn on January 28 to unpack the key trends and counter trends that you need to be aware of for 2026 and those counter trends, if you're not, they can really become blind spots, so I hope you'll join us. Check out the link here to register!

BONUS: Thank you for reading on our blog! As a token of our appreciation, here is a trended view of the same spending question we talked about in this video!