While oil and gas prices have come down in the wake of Democrats’ midterm victory on the assumption that they would seek to end the Iran conflict, experts say energy costs are unlikely to return to prewar levels given the scale of disruptions to global oil flows sparked by the conflict.
That’s left consumers in a precarious position, according to financial experts. Even households that manage to keep up with day-to-day expenses can be tipped into credit card debt by a single unexpected bill.
“Credit card debt usually has practical causes: Medical bills, car repairs, home repairs and day-to-day essentials such as gas and groceries are among the most common stories that we hear from clients,” Rossman said. “Often, the story goes something like this: ‘I was doing OK until X happened.’ In other words, until the surprise medical bill arrived. Or the roof leaked. Or the car broke down. That starts a debt cycle that’s hard to shake.”
If there is a silver lining, it’s in the labor market, which remains in a low-fire, if low-hire, holding pattern. Many economists believe that as long as there is broad employment with incomes providing a financial cushion, consumer spending is unlikely to fall off a cliff.
More recently, job growth has shown some signs of stabilizing. Over the past three months, employment growth averaged 137,000, compared with an average loss of 45,000 during the same period in 2025.
“The core support for consumer spending is being employed,” said Kathy Bostjancic, chief economist at Nationwide financial group. With gas prices trending back down, consumers may begin to start to see more daylight, she said.
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Yet wage growth remains stagnant, suggesting employers are not yet bidding up the price of job applicants. Meanwhile, the number of Americans who have been out of work for six months or more continues to climb, reaching about 2 million as of the end of October. That group now accounts for 27.6% of all unemployed workers, the highest share since December 2021, a sign of just how tough it can be to find a job.
Comments on other recent earnings calls from consumer-facing companies depict a fractured consumer landscape, with some sectors proving resilient and others on shakier ground. The sentiment was echoed by Reynolds Consumer Products, maker of Reynolds Wrap and Hefty.
“Household budgets remain under pressure, and we continue to see that reflected in purchasing behavior across our categories,” Reynolds CEO Scott Huckins said, noting shoppers are more aggressively pursuing promotions and discounts or larger value-pack sizes.
