Consumers Expect to Spend More, but Mostly Because of Prices
Spending Expectations Are Rising
Consumers expect to spend more over the coming year. According to the Federal Reserve Bank of New York's latest Survey of Consumer Expectations, median expected household spending growth rose to 5.5%, the highest level since May 2023. Expected income growth climbed only slightly, to 3.1%. That gap suggests households are planning for bigger bills, not necessarily bigger shopping lists.
Higher Prices Are Driving the Outlook
Much of the expected increase reflects what people think things will cost. Year-ahead inflation expectations rose from 3.6% to 3.9%, also the highest since May 2023. Consumers expect the sharpest increases in essentials, including 9.2% for medical care, 6.8% for rent and 5.5% for food. When everyday costs rise, there is less room in the budget for everything else.
Confidence in Buying Conditions Is Slipping
Consumers are also less sure it is a good time to make large purchases. PYMNTS Intelligence data shows its Consumer Expectations Index fell for a second straight month in September, to 54.1. Almost all of that drop came from views on the economy and buying conditions, which fell 2.2 points to 45.0. Spending more dollars does not mean shoppers are eager to spend on extras.
Job Security Offers Some Support
The labour market is one bright spot. The perceived chance of losing a job in the next 12 months fell to 13.5%, the lowest reading since December 2024. People feel relatively secure in their current roles, which helps keep spending steady. At the same time, they feel less confident about finding a new job if something changes.
Savings Cushions Are Getting Thinner
Household savings offer less reassurance. 51.8% of consumers say their savings would cover their current lifestyle for three months or less if their income stopped. Only 15.1% say their savings would last more than a year, the lowest level in 12 months. Consumers also say getting access to credit has become harder than it was a year ago.
A More Selective Holiday Season Ahead
These trends point to a holiday season that may look solid in total dollars but feel more cautious underneath. With more of each paycheque going to groceries, rent, fuel and medical costs, shoppers will likely be more careful about where the rest goes. Value, convenience and flexibility will play a bigger role in where people choose to spend. Businesses that make buying easy will be better placed to earn those dollars.
What This Means for Businesses
Heading into the busiest season of the year, a smooth payment experience matters more than ever. Customers who are watching every dollar want to pay the way they prefer, without delays or surprises at checkout. Reliable systems also matter as volume rises, since downtime costs sales. Getting the payment setup right before the rush helps businesses make the most of every purchase.
More Than a Transaction
Payments don't stop when a transaction is approved. When issues arise, businesses need real support, fast answers, and teams that take ownership.
Kubera provides payment infrastructure backed by real support and accountability.
- No automated phone tree
- End-to-end issue ownership
- Continuity of support
Contact our team at sales@kuberapayments.com or 604-484-9278
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