• National Economic Council Director Kevin Hassett says discretionary travel signals consumer optimism, but survey data shows a more cautious picture.
  • Spending intentions have improved for two straight months, yet the University of Michigan's consumer sentiment index fell to 46.3 in October.
  • The gap between observed spending and reported financial anxiety poses a challenge for the administration's economic messaging ahead of midterms.

A Tale of Two Indicators

Kevin Hassett, the National Economic Council director, is making the case that Americans are "euphoric" about the strength of the economy, pointing to discretionary travel as a key signal of consumer confidence. But the latest evidence paints a more nuanced picture: spending intentions have improved in some surveys, while overall consumer sentiment remains historically weak and financial pressures vary sharply across households.

Hassett has recently made a similar argument publicly. On October 4, he dismissed negative economic polling on CNN (SKYD), arguing that healthy retail activity contradicted claims that consumers were deeply pessimistic. His comments place the supplied headline within a broader administration effort to emphasize spending behavior over survey responses.

Some spending indicators support his position. Deloitte's October 6 consumer update reported that discretionary spending intentions had risen for two consecutive months, reaching their strongest reading since January 2026. These are intentions, however—not confirmed purchases or inflation-adjusted spending.

Travel Demand Holds Up, But Composition Matters

The Conference Board reported that 42.6% of consumers planned a vacation within six months, up 0.5 percentage points from August. The increase was limited to domestic travel; foreign-travel intentions declined. Meanwhile, planned spending moderated for hotels, airfare, and several other discretionary activities, suggesting that taking a vacation and increasing vacation expenditure are different decisions.

An October industry report citing Future Partners found that 57.3% of surveyed travelers had taken an overnight leisure trip in the preceding month, versus 49.6% in the comparable year-earlier period. But the same report put average annual travel budgets at $5,687, down from $6,068 a year earlier—more people traveling need not mean higher spending per traveler.

Sentiment Surveys Tell a Different Story

The broad mood remains much weaker. The University of Michigan's preliminary October consumer-sentiment index fell to 46.3 from 48.1 in September and 53.6 a year earlier. Its current-conditions index dropped to 44.7, although expectations improved slightly. Survey director Joanne Hsu highlighted high prices, borrowing costs, and particularly steep declines among lower-income consumers and people with smaller stock portfolios.

Michigan's October survey also found year-ahead inflation expectations rising to 4.7%, from 4.6% in September, and long-run expectations increasing to 3.5%, from 3.4%. These are consumers' expectations—not measured inflation—but they help explain why discretionary activity can coexist with dissatisfaction about living costs. The distribution of resources also matters: Michigan found sharper sentiment declines among lower-income households and those with smaller stock portfolios. Aggregate consumption can therefore look healthier than the experience of financially constrained households.

Political Messaging and Economic Reality

Hassett's remarks are also political messaging ahead of the midterm elections. In his October 4 interview, he questioned whether negative polling reflected partisan influences. The Hill (NXST) reported that tariffs and the Iran conflict were among the administration's economic and political challenges, with energy costs adding pressure on households.

The international connection is principally energy and travel costs. Michigan explicitly linked the deterioration in inflation expectations since February to the period before the Iran conflict began. The Conference Board's finding that domestic vacation intentions improved while international intentions weakened is a related shift, although those survey results alone do not establish its cause.

What It Means for Businesses and Policymakers

Resilient trip participation is encouraging for airlines, hotels, and tourism businesses, but softer budgets and moderating airfare and hotel spending intentions suggest a more price-sensitive customer rather than an unqualified demand boom. For policymakers and voters, the debate concerns which evidence best captures economic well-being—observed spending or reported financial anxiety.

The gap between spending and sentiment is not new to this particular statement. Reporting on October's survey notes that sentiment has been historically weak through much of 2026 even while spending remained healthy. Within Michigan's own series, October sentiment was 13.6% below its year-earlier level. Related evidence outside the United States also shows continued demand for experiences: Deloitte's September global consumer tracker found that 50% of respondents planned to book a leisure hotel stay within three months, up from 48% a year earlier. Yet recreation, entertainment, leisure travel, and restaurants together accounted for an unchanged estimated 20% of consumers' wallets—supporting persistence in travel demand, not necessarily a broad acceleration in discretionary spending.

In the short term, the evidence points to continued but selective travel spending. Improving discretionary intentions are a positive signal, while reduced travel budgets, weaker current-condition assessments, and elevated inflation expectations argue against interpreting demand as universal optimism. The next scheduled checkpoint is the University of Michigan's final October sentiment release on October 23 at 10 a.m. ET, which will help test whether the preliminary weakness persists.

Correction: An earlier version of this article misstated the month of Deloitte's consumer update. It was published on October 6, not September 6.