The challenge: Uncertainty is the new normal.

• That point was underscored Thursday afternoon when President Donald Trump posted on Truth Social to announce a new round of tariffs, including a 50% levy on all kitchen cabinets, bathroom vanities, and associated products and a 30% duty on upholstered furniture, effective October 1.
• Nearly 24 hours later, the White House still hadn’t shared details about new duties, leaving retailers and manufacturers in the dark on whether these levies will stack on top of existing tariffs or replace them. That makes planning extremely challenging given that the policies in place today very well may be out the window tomorrow.

Uncertainty, along with a tougher macro backdrop, are also weighing on consumers. Sentiment slipped in September across nearly every demographic group—age, income, and education—with only households with larger stock portfolios holding steady, per the University of Michigan.

Consumer spending patterns: Even so, spending remains resilient.

US consumer spending rose 0.4% month-over-month (MoM) in August, the third straight monthly gain, per the Bureau of Economic Analysis. That came on the heels of a stronger-than-expected GDP estimate showing the economy grew 3.8% YoY in Q2, the fastest pace in nearly two years, thanks to a sharp upward revision in consumer spending to 2.5% from 1.6%.

• But part of that growth reflects higher prices. The Fed’s preferred inflation gauge, the personal consumption expenditures price index, rose 2.7% YoY in August, or 2.9% excluding food and energy. On a monthly basis, it increased 0.3%, or 0.2% core.
• And consumers may be nearing their limits. Real disposable income rose just 0.1% MoM, while wages and salaries, unadjusted for inflation, slowed from the prior month. The saving rate dropped to 4.6%, its lowest level this year.

Our take: Retailers are feeling the squeeze from every direction—policy uncertainty is making long-term planning nearly impossible, tariffs are pressuring margins, and consumers who continue to spend are showing signs of fatigue as incomes stagnate and savings dwindle. To navigate the turbulence, retailers will need to be nimble by adjusting pricing, managing inventories carefully, and finding new ways to keep shoppers engaged.

Go further: Read our FAQ: What would a recession mean for advertising, commerce, and financial services? for a deeper look at the current economic landscape and the risks that lie ahead.