The American consumer has proven incredibly resilient. Despite inflation, rising interest rates, costly housing, higher insurance prices, and continued economic uncertainty, consumers keep spending. And for good reason, because consumer spending fuels the U.S. economy. However, marketers may want to begin asking a different question. While consumers may still be spending, how long will they continue to tolerate rapid price increases before they finally say, “Enough”? Marketers should watch for several important warning signs.

Consumers Are Still Spending—But the Numbers Are Becoming More Complicated

Top-line, consumers don’t appear to be in too bad of shape.

According to the Bureau of Economic Analysis, personal consumption expenditures rose by $36.3 billion, or 0.2%, in July. Disposable personal income grew by 0.5%. Dig beneath the headlines. Real consumer spending—that is, spending adjusted for inflation—was flat in July.

Spending on services rose, but spending on goods fell by $49.9 billion. That matters to marketers. Top-line revenue can grow just because prices increase—even if consumers are not buying more. Companies can post decent dollar sales figures while, behind the headlines, customers buy fewer units, shop less frequently, trade down, or simply eliminate purchases they no longer feel are worth the money. Marketers must look behind the headlines.

Inflation Hasn’t Gone Away

As of this writing, the most recent Consumer Price Index data shows consumer prices were up 3.4% in July compared to a year ago.

The Federal Reserve’s favored inflation metric tells us an even more painful story. Prices rose 3.7% year over year in July, as measured by the personal consumption expenditures (PCE) price index. If you exclude food and energy, the so-called “core PCE” is up 3.3%.

August CPI data will not be released until September 11, so anyone spouting off the August inflation number today is simply speculating. However, for marketers, what matters most may not be this month’s inflation rate. What matters more is cumulative inflation. When people experience inflation, they don’t think, “Wow, prices are up 3.4% over last year.”

Everything costs more now.” They open their fridge and wonder where they went wrong. They go to the grocery store and worry about how they’ll afford dinner. They drop their car at the repair shop and think about how cars cost way too much to repair these days. In short, consumers feel inflation when they sit back and think, “Man, everything costs more than it used to.” That’s the point where consumer psychology starts to shift.

The Consumer’s Financial Cushion Isn’t Particularly Large

The one number to watch is the personal saving rate. In July, Americans saved approximately 3.0% of their disposable personal income. That won’t go very far if there is a rainy day. Also worth watching: consumers are heavily indebted. Total household debt sat at about $18.8 trillion at the end of the second quarter of 2026, the Federal Reserve Bank of New York reported. Americans had racked up credit card balances of about $1.26 trillion, up $21 billion from the previous quarter. Americans owed $1.71 trillion in auto loans. The NY Fed noted that while overall delinquency rates improved slightly from the previous quarter, new delinquencies for auto loans and credit cards remain high. That doesn’t sound like the song of an economy about to plunge into recession. But it does call into question assumptions that consumers can simply soak up another 5%, 7% or 10% hike in prices.

Employment Is Providing an Important Safety Net

Employment is one reason consumers have proven resilient. The August jobs report released on September 4 showed the economy gained 162,000 jobs, with unemployment remaining steady at 4.1%. That matters. When people have jobs and paychecks, consumers can keep spending. Customer spending can remain stubbornly resistant to economic pressures as long as the labor market stays strong. However, marketers shouldn’t read too much into a relatively healthy jobs picture. While this point might sound contradictory, consumers are feeling the pinch. Prices were top of mind in the Federal Reserve’s latest Beige Book, which notably reported that businesses felt limited in their ability to pass on higher costs to customers because of consumer price sensitivity. Marketers should take note.

Consumer Confidence Is Another Warning Sign

Consumers don’t have to reduce their spending for marketers to worry. Attitudes can shift first. For example, The Conference Board’s Consumer Confidence Index slipped to 89.4 in August, down from 90.2 in July.

Even more telling was its Expectations Index–which gauges consumers’ short-term expectations for income, business, and labor-market conditions–dropped 5.8 points to 68.2. People can continue spending and worry about the future at the same time. But those two trends can’t continue indefinitely. When they conflict, discretionary spending is often where the squeeze shows up first.

The Warning Signs Marketers Should Be Watching

Traditional marketing dashboards aren’t enough in this environment. Revenue, market share, and brand awareness can tell marketers what happened. They may not tell them quickly enough that consumer behavior is changing. I would be watching eight indicators particularly closely.

1ne. Unit sales versus dollar sales

This may be the single most important metric. Suppose revenue increases 4%, but average prices increased 7%. That isn’t growth. It’s potentially a 3% underlying volume problem disguised by inflation. Marketers should separate revenue growth into price, volume, and mix every month.

2wo. Promotional dependency

Watch what happens when promotions disappear. If consumers increasingly wait for discounts before purchasing, pricing power is weakening. A brand can maintain revenue for quite some time by increasing promotional activity—but eventually it becomes expensive. The warning sign is straightforward: Full-price conversion declines while promotional conversion rises.

3hree. Private-label and lower-priced substitution

Consumers rarely announce that they’re financially stressed. They change what they buy. The premium brand becomes the mainstream brand. The mainstream brand becomes private label. The restaurant visit becomes takeout. The takeout becomes groceries. The new car becomes a used car—or keeping the current vehicle another year. Marketers need to monitor migration across price tiers, not merely their own brand’s sales.

4our. Purchase frequency

Customers don’t necessarily abandon brands when prices become uncomfortable. They may simply buy them less often. A customer who bought every four weeks may start purchasing every five or six weeks. That’s why marketers should measure: Days between purchases. An expanding purchase interval can be an early warning indicator of affordability pressure.

5ive. Basket size

Average transaction value can be deceptive during inflation. If the average checkout rises from $80 to $85, management may celebrate. But what if the customer previously bought eight products and now buys six? The dollar value increased. The relationship with the customer deteriorated. Track units per transaction alongside dollars per transaction.

6ix. Search behavior

Digital marketers have another valuable early-warning system: search. Watch increases in searches involving:

“cheap”

“discount”

“coupon”

“deal”

“alternative”

“used”

“refurbished”

“best value”

“under $X”

Consumers often reveal their economic concerns through search behavior before they show up clearly in quarterly financial statements.

7even. Credit-driven purchasing

Companies selling expensive products should monitor financing behavior. If customers increasingly need longer financing periods, larger incentives, buy-now-pay-later programs or lower monthly payments to complete purchases, affordability is deteriorating even if transactions are still occurring. The sale happened. But the conditions required to generate that sale changed.

8ight Customer complaints about price

Marketers should start treating price-related complaints as data rather than noise. Social listening, call-center transcripts, reviews, and customer surveys should be analyzed for statements such as: “Not worth it anymore.” “Too expensive.” “Used to buy this all the time.” “Waiting until it’s on sale.” “Switched to…” Those comments are qualitative indicators of deteriorating perceived value.

Marketers Need an “Affordability Dashboard”

Most companies have marketing dashboards. Far fewer have consumer affordability dashboards. That needs to change. At minimum, marketers should track:

• Revenue growth
• Unit-volume growth
• Average selling price
• Promotional sales as a percentage of total sales
• Purchase frequency
• Units per transaction
• Customer retention
• Private-label or lower-tier switching
• Price-related complaints
• Financing utilization
• Consumer confidence
• Credit-card delinquency trends
• Personal savings rates
• Real disposable income

The most dangerous situation is when these indicators begin moving together.

Imagine:

Revenue: +3%

Average price: +7%

Unit volume: -4%

Purchase frequency: down

Promotional purchases: up

Customer retention: down

Price complaints: up

Management might initially see 3% revenue growth.

Marketing should see a flashing red warning light.

Pricing Power Is Not Infinite

One of the biggest mistakes companies made during the inflationary period was discovering that consumers would tolerate price increases and then assuming that tolerance was permanent. It isn’t. There is a difference between consumers accepting higher prices and consumers liking higher prices.

For a while, companies can benefit from something economists call price inelasticity: demand doesn’t fall much when prices increase. But elasticity isn’t necessarily constant. At some point, consumers begin changing behavior.

They switch brands.

They buy smaller quantities.

They wait for promotions.

They postpone purchases.

They move to private label.

They repair instead of replace.

They eat at home.

Or they decide they simply don’t need the product.

That’s the point marketers need to identify before finance sees it in the revenue numbers.

Value Is About to Become One of Marketing’s Most Important Words

Premiumization was a major focus for brands for many years. Throw features on it. Improve packaging. Create premium tiers. Raise prices. Improve margins. When the economy is good and people feel like they can afford it, that strategy can be fantastic. Problems arise when people pull out their calculators and question if something is worth the money. As a result, the next marketing war may be fought on value vs premium. Value doesn’t always mean cheap either. Value means the consumer thinks: “What I’m getting is worth what I’m paying.” Those who realize the difference will win.

The Consumer Isn’t Broken. But the consumer is becoming more selective.

Americans, as a whole, have not stopped spending. Far from it. Employment is still relatively strong. Incomes are still growing. Consumers are still opening their wallets. But beneath that surface are tremors that intelligent marketers will notice.

Inflation is still high. Real spending growth was, essentially, nil in July. Americans are saving at only about 3%. Credit card balances top $1.2 trillion. New delinquency rates on some loan types are still high. Consumer confidence is waning.

Businesses are hearing of increasing resistance to price hikes from consumers. Taken individually, none of these factors means that American consumers are about to close their wallets. Taken as a whole, however, they paint a picture every marketer should know: The days when the average consumer will simply accept your next price increase are coming to an end.

Companies that wait until sales start falling should think of themselves as reactionary at best. Intelligent marketers will see shifts in elasticity, purchase frequencies, promotional responses, basket compositions, and consumer sentiment long before those changes start hurting quarterly earnings. Because America is a consumer-driven economy. But US consumers don’t have infinite dollars to spend.

Eventually, every product reaches a price where the consumer’s response changes from:”OMW!” to “Nyah!” And the companies that pinpoint that threshold before their customers do will hold a tremendous advantage over those who stubbornly plod forward after their customers have already turned away.