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Do Americans have more money in their pockets than they did a year ago
Executive summary
Data from multiple trackers and survey firms show U.S. aggregate consumer spending remained elevated year‑over‑year in 2025, driven largely by higher‑income households and holiday spending projections above $1 trillion [1] [2]. But measures of household financial well‑being and consumer sentiment have weakened for many Americans, especially lower‑ and middle‑income groups, leaving a split picture about whether "more money in their pockets" applies broadly [3] [4].
1. Aggregate spending looks higher — but that masks who’s buying
Official and industry measures indicate total consumer outlays have held up, and retail forecasts expect holiday sales to rise 3.7–4.2% over 2024, translating to more than $1.01 trillion in November–December retail sales per the National Retail Federation [1]. Morgan Stanley and other forecasters still see positive nominal spending growth for 2025, even if the pace slows from 2024’s stronger gains [2]. Those top‑line numbers suggest on average Americans are spending — and so nominal balances circulating in the economy are larger — than a year ago [1] [2].
2. “More money” depends on income slice — the rich are driving the gains
Reporting from Reuters and others highlights that spending growth is concentrated among higher‑income households: Moody’s and Reuters notes that the top cohort accounts for a disproportionate share of spending, and that the top 20% drive roughly 40% of consumer outlays, with wealth effects from the stock market helping that group [5] [4]. Analysts quoted by NPR and Reuters say the recovery in aggregate spending is increasingly skewed toward the top, meaning median households may not feel richer despite higher total spending [5] [4].
3. Consumers report feeling worse off — measures of financial well‑being are mixed
Survey‑based indices show divergence: Deloitte’s financial‑well‑being index rose briefly in September but is on a broader 2025 downtrend, and inflation concerns — especially grocery prices — have increased since November 2024 [3]. University of Michigan and other sentiment trackers show consumer sentiment sliding to multiyear lows amid the federal shutdown and policy uncertainty, indicating many households feel less secure financially even as aggregate spending holds up [4] [6].
4. Spending intentions and behavior show trade‑offs, not uniform gains
Consultancies and bank research find consumers plan to prioritize essentials and pare discretionary purchases in some categories even while some discretionary spending (travel, gifts) remains resilient for higher earners [7] [3]. Reports from Bank of America Institute and Morning Consult note younger and lower‑income cohorts slowing spending or relying more on credit tools like “buy now, pay later,” which is a warning sign that apparent spending strength may not reflect durable gains in pocketbook health for all groups [8] [9].
5. Holiday data complicate the “more money” story
The National Retail Federation and the New York Times project strong holiday spending totals — NRF’s forecast expects a historic $1+ trillion Thanksgiving–December retail season while other industry numbers put the broader November–January holiday window higher — reflecting heavy spending intent among some consumers [1] [10]. Yet media reporting simultaneously documents shoppers planning to cut back because of higher prices and the shadow of the government shutdown, underscoring that headline spending growth coexists with retrenchment for many households [11] [10].
6. How journalists and economists reconcile the split
Economists quoted in NPR, Reuters and industry analyses emphasize a core point: aggregate GDP and PCE can rise even as the average American does not feel better off, because gains concentrated at the top and asset‑price improvements (stocks) boost spending without lifting broader financial security [5] [4]. Firms like Deloitte and Morgan Stanley flag slowing growth ahead and elevated inflation concerns, suggesting the current spending picture may be temporary or uneven [3] [2].
7. Bottom line for the question “Do Americans have more money in their pockets than a year ago?”
Available sources show nominal aggregate spending and some retail forecasts are higher year‑over‑year, but sentiment indices and financial‑well‑being surveys reveal many households — particularly lower‑ and middle‑income groups — are worse off or more anxious, meaning “more money” is true in the aggregate and for higher earners but not uniformly across the population [1] [5] [3] [4].
Limitations and further reading: available sources do not provide a single, direct metric labeled “money in pockets” by income quintile; for granular household‑level change in real disposable income you would need BEA PCE and personal income tables or microdata not included in these search results [12].