US Consumer Health Update

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The composite outlook gauge in the Bain/Dynata Consumer Health Indexes fell for the third month in a row in February and is now at 99.8—down 2.2 points vs. November. The consistent downtrend in this headline reading is a warning signal for US consumer prospects.

While the outlook gauge fell, our composite measure of US consumers’ spending intent recovered this month, showing a precisely neutral reading of 100 vs. last month’s 97.9. This recovery was driven by a rebound in spending intent for upper-income Americans after the sharp drop seen last month. 

The recovery in the overall composite measure of spending intent takes this metric back to its 2024 average. In last month’s report, we hypothesized that such a rebound might occur, although the extent of any recovery remained a critical open question. While this development is positive, our upper-income consumer outlook score did not exhibit the same recovery: That metric has now fallen for three consecutive months and is down 6 points since November. 

The CHI composite gauge of Americans’ intent to save is meanwhile clearly rebounding. The last four months of savings intent data reversed a yearlong trend of declining savings intent. We believe this may reflect broader reversion to long-term norms at the expense of consumption growth (see next pages).

Our data series indicate spending intent across income groups is neutral, intent to save is increasing, the consumer outlook score is in slow decline while still around neutral, and consumers’ intent to use debt is slightly negative but flat. Taken together, the data suggests the US consumer is reverting to prepandemic norms of generally lower spending and higher savings after a period over the last few years (post-Covid), when Americans diverged from those norms and exhibited higher spending and lower savings rates. 

If consumers fully revert to prepandemic behaviors across spending, debt use, and savings, it may catch many businesses off guard. Businesses should monitor performance in the early part of the year to determine if their customers are shifting back to such prepandemic patterns of demand for their products.

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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