Consumers are still spending, but cracks are starting to show

TL;DR

Two-thirds of consumers report financial stress, with a majority citing hardship from high gas prices.
Retailers like Walmart, Home Depot, Target, and TJX are reporting strong sales, indicating continued consumer spending.
Despite gloomy sentiment, consumer spending, which drives two-thirds of U.S. economic activity, is holding up.
Higher-income households are driving current spending, while lower- and middle-income consumers are cutting back on discretionary items.
Factors like larger tax refunds are temporarily supporting spending, but higher gas prices and inflation pose future risks.
Evidence of financial strain includes increased use of "buy now, pay later" loans, persistent credit card debt, and falling enrollment in ACA plans.
If high gas prices persist, cracks may appear in consumer spending, especially if wages do not keep pace with inflation.

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