“Consumer sentiment continues to plod higher,” reported a panel of Jefferies Equity Research analysts. It came in half a point higher for early August than for July. “But in the intervening period, it sawed up and down.”
The number-crunchers found a stable consumer climate, mitigated somewhat by “rising pain at the register.” Prices were up for every category tracked by Jefferies. “On the positive side, spending looked robust in July (seemingly funded by June), with back-to-school in August looking more and more pivotal,” the analysts found.
The group found it curious that the two segments showing the greatest improvement were personal finance and business conditions. They called it “hope trade.”
Gen X sentiment continued to improve and Gen Z’s feelings showed “degradation. … The most educated consumers continue to see sentiment surge and are nearly the most upbeat cohort we track.”
Utility costs shot up for survey respondents, as much as 63 percent in some cases, and no lower than five percent. “While electricity bills are always expected to increase in the summer months,” analysts allowed, “natural gas prices compare unfavorably year/year and may be especially crimping consumers’ wallets in ’25.”
Food prices were also up, not as sharply, a category in which inflation was persistently reported by Jefferies. Health care, gasoline, and shelter were the categories most in flux.
June spending, whether discretionary or not, was said to have been “anemic.” There was a pronounced snap-back in July, which first manifested during Fourth of July weekend, continuing throughout the month.
Pricing was said to be driving spending on necessary items, while for discretionary spending, “growth still looks constrained by a shift toward staples.” While August discretionary purchases were up, the strongest months of 2025 to date were January and April, the latter evidently fueled by tariff-related panic.
