Consumer Says: How GenZers Are Experiencing and Shaping the Economy

What's new in the economy?

The producer price index rose last month above expectations in month-over-month and year-over-year terms. This comes after renewed inflation pressures are showing up in the consumer consumer price index. 

Advanced retail sales dropped in January, after four months of strong growth. The month-over-month drops were widespread, but excluded essential categories like gas stations and grocery stores, as well as food services and drinking places. Compared to last January, retail spending continues to grow year-over-year for many categories. 

Weather likely affected not only retail sales but also housing in January. Several housing indicators came in lower than expected. Housing starts tumbled while permits were mostly unchanged. Although cold weather played an important role, other factors such as potential tariffs, immigrant labor in the construction industry among others could also be putting a damper on building.

Consumer says...

Now on to Gen Z research … if you prefer listening, you can stream our latest episode here. In case you prefer text, here’s a preview of what we discuss this week:

How does Gen Z feel?

“A general sense of malaise” is how Amy He, Head of Industry Analysis here at Morning Consult, sums it up. Three main themes came up during our discussion. There is a big gender gap between Gen Z men and women: Women are more likely to say they are anxious, feeling lonely and are less confident about their financial futures than men are, an aspect that is undercovered by the media.

Gen Z feels stuck when it comes to friends and community; they are having trouble making deeper connections or new friends. Compared to the general population, they are more likely to say they are lonely. And on spending and money, they are shaping up to be a generation of doomspenders. Although they do not have the purchasing power of millennials, they still spend a lot of money on discretionary items. 

What is behind this doomshopping? Gen Z is very much associated with doomspending because they very much embody the “treat yourself” mantra as they grew up in unprecedented times and turned to shopping as a way to cope because it is one of the few things they can control.

Our recently released Quarterly Survey of Household Emergency Expenses and Decisionmaking shows a similar pattern: Compared to their older counterparts, Gen Zers rely more on debt to pay emergency expenses and are less likely to cut down spending to pay for these said emergency expenses. 

Are Gen Z falling behind on the milestones?

A common question that our industry analysts get when writing about Gen Z tries to capture if this lag on hitting the milestones is unique to Gen Z or whether other generations have also gone through a similar period. While millennials have also (and continue to) hit certain milestones later such as having kids, acquiring their first homes; these big life decisions or other milestones are getting even more pushed out for Gen Z. 

Further reading: 

• We have only scratched the surface for this report on this podcast. Find more analysis and charts here.
• The emergency expenses are getting more expensive — especially for medical bills. Consumers have conflicting views on how much they think they could pay in cash versus how much they actually pay in cash for emergency expenses. Read more about this widening gap here.
• How do voters feel about current economic conditions and who do they blame? Read more on our latest polling here.

… Stay tuned, and we’ll be back with more economic insights & research updates in two weeks.