Economic analysts observing a negative impact of inflation on consumer spending habits
In a recent report published on July 17, 2025, Jefferies Equity Research did not provide a direct, detailed summary of consumer spending trends and inflation in the United States for July 2025. However, related economic and equity outlook sources offer relevant context.
According to the SIFMA 2025 Mid-Year Economic Survey report dated July 11, 2025, consumer spending growth in the U.S. stalled early in 2025 due to fears related to the administration's policies, and the first quarter GDP declined by 0.5%. Inflation measures in mid-2025 are around or slightly above the Federal Reserve’s 2% target, with Core PCE at 2.68%, PCE at 2.34%, CPI at 2.4%, and Core CPI steady at 2.8%.
Jefferies equity research, while not focusing on a specific macroeconomic report, does discuss consumer-driven sectors. For instance, they project modest growth and same-store sales gains for fast-food companies like McDonald's amid a soft consumer traffic environment, suggesting some resilience in consumer spending in certain retail subsectors.
Jefferies Equity Research identifies three categories most affected by inflation: auto payments, food at home, and food away from home. The consumer sentiment, as recorded in June 2025, was high and only a few points off that benchmark. The sentiment rebounded from a recent dip amidst rising geopolitical tensions.
Optimism among highly educated respondents remains aloft, but less-educated respondents are less optimistic. Retail sales in June were slumping beyond what was attributable to seasonality. The comparison over the past two years doesn't show an apocalyptic situation, but some of the slowdown is due to a tough compare. Consumers are buying less, period, instead of trading off one purchase for another.
The gap between the outlooks of highly and less-educated respondents is the broadest that Jefferies has ever monitored. Housing was the category where consumers reported the highest prices. Jefferies Equity Research analysts reported intensified pressure on prices across six of the nine retail categories they cover.
Consumer spending trends have started to drop below seasonal trends. In categories such as gasoline, health care, and housing, upward price pressure was perceived by consumers. Spending growth is worse than staples growth, with the lower-income cohort posting decelerating growth and the middle and upper-income cohorts in contraction.
Jefferies analysts have changed their stance, suggesting the initial signs of spending exhaustion. Sentiment has been roughly range-bound since October 2024. Crucial high-end spending seems to be manifesting a continued slowdown.
Moreover, Jefferies Equity Research analysts have reported that inflation is becoming a more significant factor for consumers in July 2025. The report covers a variety of spending sectors, including gambling.
In conclusion, while Jefferies analysts discuss specific stock implications amid consumer trends, macro-level inflation and spending data point to moderately elevated inflation and subdued consumer spending growth going into and through mid-2025, as seen in broader economic surveys.
- The SIFMA 2025 Mid-Year Economic Survey report, dated July 11, 2025, provides a detailed summary of consumer spending trends and inflation in the United States for the month of July 2025, focusing on aspects like consumer spending growth, inflation measures, and their impact on different retail subsectors and economic categories.
- In its research, Jefferies Equity identifies three categories most affected by inflation: auto payments, food at home, and food away from home. Moreover, they suggest that inflation is becoming a more significant factor for consumers in July 2025, impacting a variety of spending sectors, including gambling. These insights shed light on the intersection of business (consumer spending and retail sectors) and finance (inflation and economic categories).
