Falling restaurant activity hints at declining retail sales, as weakening job market pressures households.

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Recent data shows a concerning shift in consumer behavior, with restaurant activity—typically a reliable indicator of retail trends—now signaling mounting pressure on household consumption. As the job market weakens, U.S. households appear to be facing increased financial strain, putting their spending power in jeopardy.

Adding to this, spending at discount retailers has outpaced total retail sales (excluding restaurants) since mid-2022, a clear sign that consumers are tightening their belts. This trend reflects broader economic challenges and suggests that American households are feeling the squeeze from rising costs and dwindling disposable income.