"The analysis, which leverages deidentified financial data from Chase customers, suggests that the period of relying on pandemic-era excess cash liquidity is now "in the rearview mirror," and many consumers are facing a spending season where budgets are "tempered by tepid income growth." For consumers who are "relatively disadvantaged by high housing costs and hold less stock market wealth"-a group that disproportionately includes younger and lower-income individuals-they may have "justenough to spend, but not enough to splurge" this year."
"Gen Z has born the brunt of what Federal Reserve Chair Jerome Powell memorably called a " low-hire, low-fire" labor market, where it's looking pretty frozen. "Kids coming out of college and younger people, minorities, are having a hard time finding jobs," Powell told reporters in September. Several weeks later, Goldman Sachs economists warned that "jobless growth" might become a permanent feature of the economy. Many economists have embraced a term from the Biden years that aligns with what JPMorgan is finding: " the K-shaped econom"
Household spending power is constrained as weak real income growth and a softened labor market reduce discretionary budgets heading into the holidays. Pandemic-era excess cash liquidity has largely dissipated, leaving many consumers with limited ability to splurge. Households facing high housing costs and low stock wealth—disproportionately younger and lower-income individuals—have just enough to spend for necessities but limited extra. Political reactions to rising cost-of-living pressures have influenced recent elections and eroded economic approval ratings. Gen Z has been especially affected by a "low-hire, low-fire" labor market, while economists warn of potential "jobless growth" and a persistent K-shaped economy.
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