Why are Americans still spending big — even as inflation and job concerns rise?

Rising inflation, a weak labor market, government shutdowns, and trade tensions are all keeping consumers on edge. Despite this pessimism, economists said consumers are ready to continue spending ahead of the upcoming holiday season.

“These challenges may slow consumers down, but they will not ultimately stop them from going out and spending this season,” Wells Fargo economists Tim Quinlan, Shannon Green, and Andrew Thompson wrote. “The anxiety that scares consumers may itself be a factor that drives households to consume in search of comfort and a sense of normalcy.”

The October Consumer Confidence Survey, released earlier this week, showed a decline in sentiment, continuing a trend of weak results associated with Trump’s tariff announcements. The Conference Board’s monthly report showed that a weak labor market has consumers concerned about future working conditions, wages and job availability. She also noted that holiday spending will decline this year.

But economists doubt shoppers will stay on the sidelines this season, with Wells Fargo predicting holiday retail sales will rise between 3.5% and 4% from last year.

“We have long cautioned against exaggerating confidence and sentiment because they do not always serve as reliable measures of future consumer spending,” Wells Fargo wrote. “Retail therapy may be just the remedy for families feeling down this holiday season.”

Stock gains boost high-income consumers

Economist Grace Zwemer of Oxford Economics wrote that big stock market gains are one element that can help boost spending, because individuals with the highest wealth are responsible for the highest share of consumer spending.

“We expect retail sales to end the year on a high note, as wealthier and older households that have benefited from stock market gains will drive increased holiday spending,” Zwemer wrote. “We expect the outsized wealth effect, tax cuts, and low interest rates to maintain a strong pace of consumption growth in 2026.”

actually, A poll showed this week Consumers earning more than $200,000 per year showed the greatest increase in consumer confidence, while this number decreased for participants earning less than $75,000 per year.

“The relationship between sentiment and spending has weakened in the years since the pandemic,” Zwemer wrote. “High-income, wealthy households, responsible for most spending, have accumulated significant net wealth since the start of the pandemic and have not been as affected by the recent bout of high inflation as lower-income groups.”