Americans are still buying things, bad economic vibes or not
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Illustration: Gabriella Turrisi/Axios
Consumers are buying higher-priced drinks, pickup trucks and more — a signal from corporate America that the economy appears to be chugging along just fine.
Why it matters: These anecdotes from the nation's biggest brands carry more weight in the absence of official government data, delayed for the foreseeable future as the shutdown drags on.
What they're saying: Consumer spending "has been remarkably resilient ... ultimately this is driving a sound economy," PNC CEO Bill Demchak said last week.
- "We've got a whole bunch of things that could land on us, but none of them are there — and none of them are certain," Demchak said after noting that consumer deposits keep growing.
The big picture: Some of the nation's biggest brands and economic bellwethers are reporting strong sales. That signals that, at least in aggregate, sluggish jobs growth and still-high inflation are not denting spending.
- "Though consumer sentiment remains soft, we experienced strong demand for Filtrete [air] filters, Scotch tape and Meguiar's [car care] products," 3M CFO Anurag Maheshwari said.
Zoom in: Some companies say the hit from President Trump's tariff policies is not as bad as previously feared.
- The latest example is General Motors, which reported better-than-expected earnings for the third quarter, thanks to strong demand for its pickup trucks and smaller tariff-related charges.
- "We expect next year to be even better than 2025," GM CFO Paul Jacobson told investors on Tuesday.
Threat level: That said, soda giant Coca-Cola warned that higher-income consumers might be helping hold the line on spending as lower-income shoppers pull back — a months-long economic trend that could be worsening.
- That split was evident in Coke's business in the third quarter; pricier drinks brands, including Topo Chico or Fairlife, are outperforming.
"While many consumers remain in overall good shape, certain segments of the population are under pressure," Coca-Cola CEO James Quincey told Wall Street analysts on Tuesday.
- "Some factors are transitory ... others may be long lasting, like the cumulative impact of inflationary pressures, uncertain trade dynamics and an ever changing geopolitical environment," Quincey added.
The bottom line: "It is truly a bifurcated economy," American Express CEO Stephen Squeri told investors last week.
