Consumers' collective feeling about the economy isn't matching our spending behavior

"Normally spending and feelings go together. Not right now. MARY LOUISE KELLY, HOST: Something is puzzling our Planet Money podcast team - two economic indicators behaving unusually. The first is consumer sentiment - our collective feeling about the economy. The other is consumer spending - how much we collectively spend. Now, those two lines on a chart normally move precisely the same way, but recently, they've split up."

"He found that more than half of the credit card spending is coming from people with the highest income. And while that might sound like, yeah, of course the wealthiest people spend a lot, it's more than just that. Patki says the growth rate in their spending is what is particularly significant. The highest-income consumers are spending billions and billions more than they, as wealthy people, used to in a month."

Consumer sentiment is low even as overall consumer spending remains strong. High interest rates, ongoing inflation, and tariffs would normally slow spending, yet aggregate spending is elevated. Credit card data shows more than half of credit card spending comes from highest-income households. Highest-income consumers increased spending substantially over the past decade, far outpacing other groups. Highest-income spending is markedly higher in growth rate, while lowest-income consumers have also increased spending but by a smaller percentage. The spending pattern by income brackets helps explain the divergence between sentiment and aggregate spending.

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