Consumer Angst

US consumers remain unusually depressed: confidence has fallen to levels typically seen only during recessions. This is puzzling at first glance — unemployment remains low, and equity markets have held up reasonably well in USD terms this year (think positive wealth effect).

Beneath the reassuring headline data, households are feeling the strain. The combination of persistently high prices, tighter financing conditions, political and economic uncertainty ( think tariffs ) and a cooling job market has eroded the financial comfort of many Americans. Sentiment surveys show that consumers remain wary about both their day-to-day situation and the economic outlook, with concerns ranging from slowing income growth to the possibility of a downturn in 2026.

At ECP, we are not macro investors, but we integrate these signals into our bottom-up analysis. A weak US consumer could clearly represent a clear headwind for US discretionary stocks, reinforcing our preference for more resilient and attractively valued businesses.