Bank of America, Wells Fargo and JPMorgan Chase reported their quarterly earnings yesterday, and executives seemed to agree on one fact: Consumer spending is strong.
“Consumer spending has recently expanded and continued to outperform our expectations,” Bank of America CEO Brian Moynihan said on a Q2 2026 earnings call Tuesday. “So overall, the U.S. economy has proved more durable than expected, supported by the strong consumer, ongoing AI-driven investments across the board and easing energy costs, though inflation and tighter monetary policy remain key risks.”
Such an assessment seems to fly in the face of consumer sentiment, which has been trending downwards amid concerns about tariffs, rising gas prices, and inflation. In fact, nearly two-thirds of consumers believe a recession is likely, according to the latest EY-Parthenon data.
The findings present a paradox that can muddle CX strategy. If consumers are still spending, do brands need to alter their experience to keep customers engaged?
“For CX professionals, the real risk here is complacency,” Jon Picoult, founder and principal of Watermark Consulting, said in an email. “If you believe the spending and sentiment data, it points to a fragile state of affairs.”
Consumer sentiment offers context. Consumers may still be spending, but their behaviors and attitudes towards how and where they spend their money have changed. They want value — and they’re looking for deals.
As Halle Stern, director analyst in Gartner's marketing practice, told CX Dive last week, consumers are “looking for any way to get some sort of discount,” including through loyalty program rewards and discounts. Loyalty Lion research found that amid economic uncertainty, 53% of consumers say they are likely to sign up for a program.
“Companies have to understand that this can all turn on a dime — and so, rather than just basking in the spending frenzy, they should be rededicating themselves to earning consumers’ business,” Picoult said. “That means accentuating the value they provide and creating experiential proof points that convincingly demonstrate that value.”
Value doesn’t just have to be a good financial deal. It can be about providing joy.
While joy is always a desirable outcome, “it’s arguably more important — and differentiating — when consumers are feeling down,” Picoult said.
That dynamic is behind the rise of Gen Z’s “little treat culture” in the U.S. in which young people indulge in small luxuries. Picoult also points to the “emotional value” craze in China, where consumers who are feeling down seek experiences that lift them up.
EY’s data also finds that consumers on both the upper end of the income spectrum and the lower end say they are overspending. Overall, about 1 in 5 U.S. consumers surveyed said they spent “a little more” or “a lot more” than they earned, using savings or going into debt to fund their purchases.
Brands can’t expect consumer spending to keep rising forever.
CX leaders need to prepare for “an inevitable downturn in spending,” including how to handle the “silent periods” in the customer relationship, Picoult said.
“The customer experience, after all, doesn’t just encompass those times when people are interacting with your business,” Picoult said. “It’s also about those times when they don’t, and how you proactively engage them during those periods.”
That boils down to having a clear communications strategy. Brands need to proactively engage with customers and remind them of the value and experience they provide, “so if and when they pull back on spending, you’re doing something to stay top-of-mind,” Picoult said.
