Economist's Note
Brian LeBlanc, Head of Economic Analysis, PNC Economics Research
Hallazgos principales
- Consumer spending accelerated again in June: Total card spending rose 6.2% YoY, matching another four-year high, and 5.4% excluding gas. Lower gas prices, World Cup-related spending, and Prime Day's shift into June all provided a boost, though some payback is likely in July.
- The K-shaped economy is nearly converged: Lower-income spending jumped from 1.7% at the end of 2025 to 4.9% YoY, now just 0.8% below upper-income household spending. Improving job growth and larger tax refunds earlier this year have helped narrow the gap.
- Balance sheets remain healthy: The share of households living “paycheck-to-paycheck” has remained stable at roughly 60% throughout 2026, slightly below pre-pandemic levels. Household cash savings buffers have also held up through the first half of the year.
- Credit card debt remains manageable, but is rising: Credit card balances have increased across all income cohorts, but from a low base and with few signs of financial stress.
- Wealth effects are quietly doing a lot of the work: Rising brokerage inflows, concentrated among older and higher-income households, continue to support spending at the top of the income distribution even as tax refund-related tailwinds fade.
- The open question is durability: Support from larger tax refunds is fading. A strengthening labor market may be the most important factor in determining whether the recent convergence in spending trends can be sustained.
Two developments stood out in the first half of 2026.
The first is the remarkable resilience of spending despite higher gas prices and persistent inflation. Total card spending accelerated to 6.2% YoY in June, a four-year high. Some of June's strength likely reflects temporary factors, including World Cup-related spending and Prime Day's shift into June from July, which could lead to some payback in the months ahead. Even so, the broader trend has been encouraging, with spending growth strengthening beyond the pace of inflation.
The second is the significant improvement in spending among lower-income households. For years the story has been two diverging lines: higher-income households pulling away, lower-income households falling behind. That gap has narrowed considerably in 2026, nearly closing in June. Sin incluir el gasto en gasolina, el gasto interanual de los hogares de menores ingresos se aceleró del 1.7 % a finales de 2025 al 4.9 % en junio, por lo que ha quedado apenas por debajo de la marca del 5.6 % de los hogares de ingresos más altos. That earns the K-shaped economy a new chapter, if not a new name.
That kind of convergence would be less reassuring if it came at the expense of household finances. It hasn't. We see little evidence that the improvement in spending in 2026 has been accompanied by a meaningful deterioration in household balance sheet health. The percent of households we estimate living “paycheck-to-paycheck” has remained stable in 2026 and slightly below pre-pandemic levels. Cash savings buffers have held up even adjusting for inflation.
¿Qué sucede con la deuda? Here the story is more mixed. Credit card balances have increased around 9% YoY across all income cohorts in 2026, indicating that consumers are to some degree using debt to finance this improvement in spending. Sin embargo, el punto de partida en este caso es importante. Los saldos promedio se mantienen muy por debajo de los niveles previos a la pandemia después del ajuste por la inflación. Además, el porcentaje de saldos de tarjetas de crédito que se liquidan cada mes se sigue ubicando por encima de los niveles previos a la pandemia.
Stronger job growth and larger tax refunds get most of the credit for narrowing the gap, but wealth effects are a quiet third factor. Tax refunds gave lower-income spending its first boost this year, and that's fading. Brokerage inflows into checking, concentrated among older and higher-income households cashing in on the market's run-up, are keeping spending strong at the top even as the gap narrows. The top isn't slowing down; the bottom is catching up faster.
Durability is the question. Tax refunds and expanded credit access fade or reverse, and a firmer labor market is what would make this convergence last. Watch direct deposit and payroll trends: keep improving and the K stays converged. Soften, and it could widen again.
Consultar las ediciones anteriores de Evaluación de la salud financiera del consumidor
