United States Households Send a Split Signal

Confidence rebounds, plans cool

Consumer confidence improved to 91.7 in October, according to PNC Economics. The improvement followed three straight months of decline and was broad-based: the present situation index rose 8.6 points to 120.4 and the expectations index rose 6.9 points to 72.6. Confidence increased among consumers under the age of 35 and among households with income of 100,000 dollars or more, and PNC reported that confidence is highest among Gen Z and Millennials. m:…4884

The details temper the headline. Median one-year-ahead inflation expectations fell to 4.7 percent in October from 5.1 percent in September, but inflation expectations remain elevated, and confidence is still down 4.0 percent from a year earlier. Consumers plan to spend less on durable goods and services over the next six months, according to PNC, and consumers expect interest rates to rise over the next year. The labour market differential rose 2.4 points to positive 5.3 percent in October, a modest improvement that sits alongside those cautious spending plans. m:…4884

PNC expects real consumer spending to rise at a 3.5 percent annual rate in the third quarter, which would be consistent with a consumer who feels better but spends selectively. The October confidence report therefore reads less as a turn toward broad strength and more as a stabilisation: sentiment recovered from a three-month slide, while forward spending intentions stayed restrained. m:…4884

Housing rises on thin supply

Housing tells a similar story of prices supported by scarcity rather than affordability. The seasonally adjusted S and P Case-Shiller Home Prices Index increased for a fourth consecutive month in August 2026, with national home prices up 2.1 percent on a year-ago basis, according to PNC Economics. The inventory of existing single-family homes for sale was 1.57 million units in August, well below the historical average of 2.2 million units. m:…8442

Affordability remains the constraint. PNC reported that the typical 30-year fixed mortgage rate has risen to above 7.3 percent, that housing affordability is near its lowest level since the 1980s, and that PNC expects mortgage rates to remain elevated, above 6.5 percent, in the near term. m:…8442

Older households trail the recovery

Bank of America Institute analysis adds an age split to the picture. Bank of America aggregated credit and debit card data shows older generation spending growth has lagged other cohorts over the last year, even though older households have experienced sizeable wealth gains. Stronger consumer spending is currently driven by labour income, according to the analysis, and older households have less exposure to accelerating wage growth. m:…8690

The explanation is distribution, not averages. Wealth distribution among older households is highly uneven, Bank of America reported, and that unevenness limits the extent to which rising wealth supports spending across the older cohort. Variation in income sources explains spending differences among older households, and older households reliance on income sources less sensitive to current wage growth leaves them less exposed to the wage gains driving spending elsewhere. m:…8690

The 2027 Social Security cost-of-living adjustment of 3.6 percent could narrow that gap. Bank of America reported that the adjustment could provide a meaningful boost to older households in 2027, and that if inflation moderates, benefit increases may outpace price growth and support older households purchasing power. The open question is whether that indexed support, combined with stabilising confidence, is enough to close a spending gap driven by wage exposure and uneven wealth, rather than by sentiment alone. m:…8690