Americans are still spending, but not as freely as before. JPMorgan analyst Richard Shane notes that overall spending growth slowed to 2.4% in March, down from earlier in the year.

Blame it on cautious consumers, a later Easter, or just a tough comparison to 2024 – but the numbers don't lie.

Gen Z, Millennials Keep the Party Going

Younger consumers aren't feeling the pinch just yet. Their spending shot up nearly 5% in March, well ahead of older generations, where spending has flatlined, says Shane. Whether it's streaming subscriptions, dining out, or the latest must-have gadgets, this cohort continues to drive the economy forward.

Read Also: The Rich Are Spending 58% More—Can The Economy Survive If They Stop?

Discretionary Spending Takes A Backseat

Not all purchases are getting the green light. Shane notes that consumers are prioritizing essentials, with non-discretionary spending up 3.1%, while discretionary spending lagged at 2%.

Travel-related purchases like airline tickets and hotels took a hit, reflecting a pullback in big-ticket splurges.

While the Consumer Staples Select Sector SPDR ETF (NYSE:XLP) is up 4.36% YTD, the Consumer Discretionary Select Sector SPDR ETF (NYSE:XLY) is down 9.88% YTD; down 5.88% over the past month alone.

Gas Prices Offer A Surprise Relief

Here's one bright spot: spending at gas stations plummeted over 10%, thanks to lower oil prices. The Energy Select Sector SPDR ETF (NYSE:XLE) has gained over 7% in the past month.

That's good news for middle- and lower-income households, as cheaper fuel means more cash for other necessities.

Health, Wellness Get A Boost

One area still on the rise? Healthcare and pharmacy spending, which climbed 8%. Consumers are prioritizing health, perhaps a lingering effect of pandemic-era habits or simply an aging population driving demand.

With economic uncertainty looming, it's clear that consumers are tightening their wallets in some areas while splurging in others.

As Shane puts it, the data reveals a shift in priorities—where Gen Z swipes, and Boomers hesitate, shaping the spending landscape for the months ahead.

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