One of the main market narratives over the end of the summer has been the downgrades to the assessment of U.S. job market conditions due to soft employment1 reports2 and, more notably, sizable downward revisions3 to prior payroll figures that make the earlier assumed strong gains look comparatively meagre.
Given the importance of the consumer as a driver of growth in the broader American (and global) economy, signs of softening in employment and the potential implications for household’s ability to spend raises the risks to outlook — and indeed, this increase in downside risks was stated as the key factor behind the decision for the policymakers at the U.S. Federal Reserve (Fed) to cut its policy rate target4 last week.
Interestingly, however, the day before the Fed made its decision, the U.S. Census Bureau’s advance estimate of retail sales for August5 provided a sizable upward surprise relative to market expectations, while prior months saw upward revisions. The new data saw forecasts for current quarter growth in U.S. real gross domestic product revised materially higher (the Atlanta Fed’s GDPNow6 was revised up to 3.4% for Q3, for example).
Obviously, this begs the question: if job market conditions in the U.S. are deteriorating and a five-year high share of Americans are viewing jobs as “hard to get” as per a survey from The Conference Board7, why are indicators of spending holding up so well?
For starters, a softening job market does not mean that the U.S. employment backdrop is outright “soft.”
While there are indications that the demand for labour in the U.S. has slowed, this has just reduced the demand imbalance in the market rather than created an indication of an excess supply.
The latest Job Openings and Labor Turnover Survey8 from the U.S. Bureau of Labor Statistics showed that there were 7.181 million unfilled job openings across the U.S. in July, which is down from readings of more than 10 million in 2021 and 2022, but still a historically elevated tally that effectively matches the current number of unemployed Americans. For some context, for the two decades before 2020, there were an average of roughly two unemployed people for each job opening, so relative to this, there is still a dearth of available workers (and recent policy changes suggest that the supply of workers will continue to be a problem).
(ratio)
Source: Guardian Capital, based on data from the U.S. Bureau of Labor Statistics to July 2025
Echoing this, while hiring in the U.S. has slowed as firms are not adding to headcounts as aggressively as they have been in recent years, and the rates of people voluntarily leaving their jobs have moderated, layoffs remain negligible and at rates that remain below the pre-pandemic norms.
(share of total employment; percent)
Shaded regions represent periods of U.S. recession; source: Guardian Capital, based on data from the U.S. Bureau of Labor Statistics to July 2025
The state-level unemployment insurance program data corroborate the limited firings — while there was a bounce in new claims filings for the programs two weeks back that can largely be attributed to idiosyncratic developments in Texas in that week, last week saw the number of initial claims reverse course to remain generally consistent with trends in recent years that do not suggest a broad turn for the worse.
(thousands)
Source: Guardian Capital, based on data from the U.S. Bureau of Labor Statistics to September 13, 2025
So, while the going may not be as good as it was for new entrants to the workforce in the U.S., those already employed are seeing their cash flows continue, which provides a support to spending.
Furthermore, the general health of household balance sheets suggests that consumers have the capacity to spend more (yet save less) out of current income as net worth sits at all-time highs.
The quarterly Financial Accounts of the United States9 published by the Fed on September 11, showed that aggregate household net worth in the U.S. rose by US$7 trillion over the three months ended June to a new record high of US$176 trillion, thanks to the rebound in financial markets, which represents net worth of about $645,000 per American over the age of 16, or $1.35 million per U.S. household10. Even adjusted for inflation, that represents the largest excess of asset values over liabilities on record.
(trillions of 2024 U.S. dollars)
*Household net worth divided by the personal consumption expenditure price deflator; shaded regions represent periods of U.S. recession; source: Guardian Capital based on data from the U.S. Federal Reserve Board to Q2 2025
The distribution of wealth is extremely skewed toward the higher end of the spectrum; however, the Distributional Financial Accounts,11 the disaggregation of the data published by the Fed on Friday, September 19, indicated that those less wealthy households have been participating in the general gains in net worth and have continued to actually outpace the other cohorts on a relative basis.
These data show that net worth among the bottom 50% of households in the U.S. by wealth has now increased by 112% since the start of 2020 (to an average of about US$65,000) while the other cohorts have experienced relative gains of roughly 50% over the same time span (though, the absolute dollar gains have been larger; average net worth for the upper-middle 40% was about US$950,000 at the end of Q2 and US$8.5 million for the top 10%). These are strong gains overall and a significant relative improvement in financial position for the typically more financially vulnerable half of the population.
(indexed; Q1 2020 = 100)
Shaded regions represent periods of US recession; source: Guardian Capital based on data from the US Federal Reserve Board to Q2 2025
The broad upgrade in finances in the U.S. over this cycle, particularly for the less wealthy households, goes a long way to explaining the oft-cited “resiliency” in consumer spending this year (and since the pandemic hit). Strong financial positions combined with firm job markets support spending over and above the necessities of life, even in the face of rising costs of living — it is no coincidence that expenditure on less tangible and highly discretionary activities such as travel and leisure has been persistently strong.
For example, data released last week by industry tracker Pollstar12 showed that concert ticket sales over the first nine months of the year set new all-time highs globally and in turn have pushed total gross revenues worldwide to new records — even above last year’s Taylor Swift-supported strength (Beyoncé, Coldplay and Shakira have been the biggest draws in 2025).
(millions)
Source: Guardian Capital, based on data from Pollstar to September 2025
Demand has also been strong among those with a preference for live music as part of a broader story, as Broadway13 attendance this season trails only 2018/19 for the highest on record (ditto for grosses); for sports fans, Major League Baseball14 attendance is up year-to-date league-wide, even as two teams have spent the year in minor league stadiums (and I can attest that tickets for the impending playoffs are neither easy to come by nor cheap).
The demand for these types of in-person experiences is playing a role in keeping demand for air travel sky-high. In the U.S., TSA checkpoints15 continue to process record high numbers of travellers, running just ahead of last year’s numbers, and there continue to be record high numbers of flights in the air worldwide at any given time, based on data from FlightRadar2416.
(millions; seven-day moving average)
Source: Guardian Capital, based on data from the US Transportation Security Administration to September 21, 2025
The bottom line is that the U.S. consumer broadly appears to remain on pretty solid footing for now, which could provide continued support for the most important cog in the global economic machine.
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David Onyett-Jeffries
David Onyett-Jeffries is Vice President, Economics & Multi Asset Solutions, at Guardian Capital LP (GCLP). He provides macroeconomic guidance to GCLP and its affiliates. Additionally, he is a portfolio manager of GCLP’s multi-asset portfolios and funds and works closely with GCLP’s Directed Outcomes team.
1 U.S. Bureau of Labor, Economic News Release, The Employment Situation – July 2025, August 1, 2025, https://www.bls.gov/news.release/archives/empsit_09052025.htm
2 U.S. Bureau of Labor, Economic News Release, Employment Situation Summary, The Employment Situation – August 2025, September 5, 2025, https://www.bls.gov/news.release/empsit.nr0.htm
3 U.S. Bureau of Labor, Economic News Release, Current Employment Statistics Preliminary Benchmark (National) – March 2025, September 9, 2025, https://www.bls.gov/news.release/prebmk.nr0.htm
4 Board of Governors of the Federal Reserve System, Press Release, Federal Reserve issues FOMC statement, September 17, 2025, https://www.federalreserve.gov/newsevents/pressreleases/monetary20250917a.htm
5 United States® Census Bureau, Business and Economy, Retail – Monthly, Sales, Advance Monthly Sales for Retail and Food Services, September 16, 2025, https://www.census.gov/retail/sales.html
6 Federal Reserve Bank of Atlanta, Research & Data, Center for Quantitative Economic Research, GDPNow, September 17, 2025, https://www.atlantafed.org/cqer/research/gdpnow
7 The Conference Board, Economy, Strategy & Finance Center, US Consumer Confidence Little Changed in August, August 26, 2025, https://www.conference-board.org/topics/consumer-confidence
8 U.S. Bureau of Labor, Economic News Release, Job Openings and Labor Turnover – July 2025, September 5, 2025, https://www.bls.gov/news.release/jolts.nr0.htm
9 Board of Governors of the Federal Reserve System, Releases, Financial Accounts of the United States – Z.1, September 11, 2025, https://www.federalreserve.gov/releases/z1/
10 Federal Reserve Bank of St. Louis, Household Estimates (TTLHHM156N), September 23, 2025, https://fred.stlouisfed.org/series/TTLHHM156N
11 Board of Governors of the Federal Reserve System, Distribution of Wealth, Announcements, Distributional Financial Accounts Overview, September 23, 2025, https://www.federalreserve.gov/releases/z1/dataviz/dfa/
12 Pollstar, News, 2025 Q3: Beyonce Has Top Tour; Record-Setting Top 100; Smaller Venues Face Challenges, September 5, 2025, https://news.pollstar.com/2025/09/05/surpassing-expectations-2025s-q3-top-100-tours-set-all-time-gross-ticket-sales-records/
13 The Broadway League®, Research & Statistics, Statistics – Broadway in NYC, September 23, 2025, https://www.broadwayleague.com/research/statistics-broadway-nyc/
14 Baseball Reference, 2025 Major League Baseball Attendance & Team Age, Miscellaneous Team Info, September 23, 2025, https://www.baseball-reference.com/leagues/majors/2025-misc.shtml
15 Transportation Security Administration, TSA checkpoint travel numbers, September 22, 2025, https://www.tsa.gov/travel/passenger-volumes
16 FlightRadar24 Live Air Traffic, Flight tracker map, Aviation data, Statistics, Flight tracking statistics, accessed on September 23, 2025, https://www.flightradar24.com/data/statistics
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Published: September 23, 2025
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