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- The Bain/Dynata Consumer Health Indexes (CHI) headline composite outlook gauge rose to 100.1 in October, from 98.8 in August, reflecting modest gains in prospects across income groups.
- Over the past several months, we have highlighted multiple signals from our CHI data that US consumers’ prospects were deteriorating. The outlook score for upper-income Americans fell in both August and September, and this group’s spending intentions also fell in September. Among lower-income households, both outlook and spending intentions also worsened in each of the prior two months.
- However, the deterioration in many of our consumer health data series largely stopped this month. Specifically, our scores for both upper-income and lower-income earners’ outlooks and spending intentions all ticked upward.
- Not every signal is positive. In our CHI data series, a neutral reading is 100. Values below 100 are still negative readings, even if they are higher than the prior month. So while the October outlook score for lower-income Americans rose 1.5 points, it still remains in negative territory at 96.2—implying that conditions in the labor market remain challenging and could still be worsening.
- Lower-income households’ spending intention score also climbed 3.1 points, to just above 100, indicating that these households are set to hold spending steady but are not planning new spending. Our spending intent score for middle-income Americans remains stuck at 98.2, signaling that a slight contraction in spending is likely underway among these households.
- The steep and uniform descent in CHI readings for the last several months has now moderated—but this is not an “all-clear” signal for the consumer. Upper-income consumers’ spending intent fell in parallel with their outlook scores in September, even as equity markets set record highs. It is not our role to predict corrections in equity markets, only to note that corrections eventually occur. However, upper-income earners appear to be anticipating a correction, even getting ahead of one in recent months. Middle-income earners’ outlook remains dependent on a relatively frozen housing market, with their lackluster spending indicating they are under pressure. The outlook for lower-income earners, which is tied to their income, tells a story of limited job-market prospects, even if the deterioration has eased.
- In recent reports, we advised businesses to include negative scenarios in their planning for the second half of 2025. Despite signs of easing consumer pressures in our October data, we advise ongoing vigilance and attention to next month’s readings ahead of the crucial holiday spending season.
Bain and Dynata created the Consumer Health Indexes in 2017 to support business decision makers in their near- and midterm planning for their businesses. To achieve this, we have been asking questions that are within the expertise of the people taking our surveys. What are their personal spending plans? What are their saving plans? What is their use-of-debt plan? These are direct, easily understandable questions about survey respondents’ near-term expected behaviors. They require little interpretation, macroeconomic expertise, or filtering through the lens of the political or news cycle. Since 2017, our clients have been using our Consumer Health Indexes as a differentiated data point relative to existing confidence indicators.
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