At a Glance:
- NRF expects no significant drop in consumer spending during the 2nd half
- Forecasts 9.4% increase in dorm furnishings spending
- Credit card delinquency rates near 13% according to NRF
- Personal savings rate dropped to 3.0% in April
WASHINGTON – Despite red flags, including a severe drop in savings coupled with soaring credit card debt, consumers continue to shell out for key seasonal events.
Data shared during the National Retail Federation‘s “Back to School Consumer Trends Webinar” on July 21 underscored the pattern. So far in 2026, consumer spending grew year-over-year for Valentine’s Day (+5.8%), Easter (+3.3%), Mother’s Day (+9.7) and Father’s Day (+13.6%). Spending also ticketed up around Super Bowl, St. Patrick’s Day and Independence Day.
For the Back-to-College season, NRF is predicting the outlay for dorm and apartment furnishings alone will jump 9.4%, with total BTC spending across all categories expected to blow past the $100 billion mark for the first time.
“Despite low (consumer) sentiment and high gas prices, over course of year we’ve seen record per-person spend in almost every event,” said Mark Matthews, NRF chief economist and executive director of research.
3 key takeaways on consumer health:
- Most consumers don’t have ready cash to fall back on. The bottom 80% of households have seen flat to negative growth in their liquidity (savings and money market accounts) over the past three years. Within that group, households with incomes around $35K-$65K have seen liquidity growth of just 0.5%, while those around $105K-$175K have seen growth of only 0.3%. The other cohorts in the 80% have experienced negative liquidity.
- Debt burdens are getting heavy. Credit card debt and delinquency rates are nearing record highs, with delinquency rates running around 13%. “I’m not too worried about this yet because the transition to serious delinquency is starting to ease,” said Matthews.
- Consumers are opting to spend rather than save. Savings are also approaching a record low. Personal savings as a percentage of income dropped to 3.0% in April – well off the long-term average of 8.4%.
“Inflation has started to eat into wages,” Matthews noted. “Inflation is going to play a big role in consumers’ ability to keep spending.”
Still, he expects inflation to soften in the coming months and tariffs to slow. Although economic growth is likely to moderate, Matthews predicts consumers will remain resilient for the remainder of 2026, albeit careful about how they spend.
“It’s going to be a challenging environment for retailers out there, but it could be worse,” he added. “There’s no reason to assume we’re going to see dramatic softening over the second half of the year.”
