Is the US consumer market showing a red light? A number of giant CEOs warned in unison: low-income groups “have bottomed out their money pockets”

The Zhitong Finance App learned that over the years, American consumers have been the mainstay of economic resilience. Even though inflation is high, borrowing costs rise, and daily spending support continues to rise, household budgets are still struggling to support them. Recently, however, the heads of many leading companies have spoken out intensively, warning that this consumption momentum may be approaching a tipping point.

Consumption fatigue is beginning to show: demand is under pressure across the board, from food to household appliances

Steve Cahillane (Steve Cahillane), CEO of KHC.US (KHC.US), gave the most straightforward assessment of the financial pressure on low-income groups. In an interview in May of this year, he said bluntly: “They were really shy at the end of the month. We are seeing negative cash flow for low-income people and have to use their savings to maintain daily expenses.”

As the parent company of famous brands such as Heinz, Kraft, and Philadelphia, Kraft Heinz has begun to cut prices on some overpriced products, increase promotional efforts, and launch smaller packages and lower selling prices to cater to consumers with tight budgets. Cahiran added that the industry has experienced “shrinking sales” for many years, and the root cause is that consumers have been forced to absorb “too much price increase.” He warned that a new round of price increases would further squeeze already tight household expenses. “We are likely to see more significant inflation, and no one wants to see that kind of situation,” he said.

Cahilan is no exception. McDonald's (MCD.US) CEO Chris Kempczinski (Chris Kempczinski) also pointed out that consumers are under pressure and mentioned “increased anxiety.” Ian Borden (Ian Borden), the company's chief financial officer, further stated that the rise in oil prices hit low-income households particularly clearly. This group has significantly cut spending, while high-income customer groups have shown greater resilience.

Marc Bitzer (Marc Bitzer), CEO of home appliance giant Whirlpool (WHR.US), also painted a picture of a sharp contraction in demand for major appliances. Juan Carlos Puente (Juan Carlos Puente), president of North America, described the current situation as a “recession-level industry contraction,” and indicated that demand for optional consumer goods has declined by about 15%.

Credit cards and savings rates issued a warning The cost of living crisis is far from over

In addition to corporate financial reports, a number of macro data also confirm that the financial pressure on American households is increasing. As of the first quarter of 2026, the outstanding balance of US credit cards reached $1.25 trillion, and the balance of auto loans climbed to $1.69 trillion. Meanwhile, residents' willingness to save continues to decline, and the personal savings rate dropped to only 2.7% in June.

The Federal Reserve's latest “Report on the Financial Well-being of American Households” paints a clearer picture: 16% of adult respondents said they failed to pay all of their bills in full last month; while 42% of those unable to pay in full had overdue at least once.

Taken together, not all Americans have “run out of food,” but households with the fewest financial buffers are shrinking their ability to withstand rising costs — some of whom have to rely on credit or savings to maintain daily expenses.

Although the overall inflation rate has fallen from its high level during the pandemic, the actual impact of the cost of living crisis on consumers continues. According to data from the US Bureau of Labor Statistics, since the beginning of 2020, food prices have increased by more than 33%, housing costs have risen by about 33%, and energy prices have soared by more than 42%.

What is worth being wary of is that even if the growth rate of inflation slows down, the price increases accumulated before will not “go back up”; higher prices have become a “new baseline” for household budgets. This means that the average household's space for coping with unexpected expenses or accumulating savings is being further compressed. According to the Minneapolis Fed inflation calculator, the purchasing power of $100 today is only equivalent to $11.74 in 1970. For already struggling households, the continued loss of purchasing power makes it harder to build emergency reserves, pay down debts, or make long-term investments.

Anti-inflation strategies

Throughout history, investors have always found effective ways to hedge against inflationary erosion and safeguard long-term purchasing power. The following 2 types of assets have been tested by the market cycle and are worth paying attention to.

Gold — an eternal safe-haven asset

When it comes to preserving wealth and fighting inflation, gold is one of the few assets that has stood the test of time. Its appeal is simple and straightforward: unlike fiat money, gold cannot be added at will by the central bank. At the same time, gold is seen as the ultimate safe-haven tool — it doesn't anchor any single country, currency, or economy, and investors often pour into the gold market when economic turmoil or geopolitical uncertainty heats up, driving up its price.

Ray Dalio (Ray Dalio), founder of the world's largest hedge fund Bridgewater Associates (Bridgewater Associates), has repeatedly emphasized the defensive role of gold in investment portfolios. He said last year: “People usually don't allocate enough gold in their portfolios. When the market is facing headwinds, gold is a very effective risk diversification tool.” Despite the recent correction in gold prices, the cumulative increase over the past 12 months is still over 30%.

US Real Estate — A Cash Flow Tool to Fight Inflation

In addition to gold, US real estate has also proven to be a powerful hedge against inflation. When inflation rises, property values often soar high due to material, labor, and land costs; at the same time, rental income is usually adjusted according to inflation to provide landlords with cash flow linked to prices. For example, over the past 10 years, the S&P CoreLogic Case-Shiller US Home Price Index has increased by 88%, reflecting strong demand and limited supply.

The US consumer engine is showing signs of fatigue, and the financial cushion for lower-level households is getting thinner. For investors, inflation is not a short-term phenomenon, but an enduring structural challenge. Drawing on history and rationally allocating physical assets such as gold and real estate, it is expected that good investment returns can be obtained in this kind of macro context.