For the first time since the dawn of the Great Recession, American consumers are tapping the brakes on a key category of spending.
According to the July 2025 Bank of America Consumer Checkpoint report, data shows shifting habits and a significant decline in spending.
It marks the third consecutive monthly drop in services spending — a trend not seen since the 2008 financial crisis.
So, where are Americans still swiping their cards, and where are they holding back?
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Less trips, fewer swipes
Americans aren’t necessarily spending less per purchase, but they are spending less often.
Travel and tourism have taken the biggest hit. Airlines, in particular, have seen declines in both the number of transactions per month and the volume of households booking air travel. While ticket prices have dropped slightly, fewer consumers are flying at all. From April to June 2025, some households skipped air travel entirely, according to the Bank of America Consumer Checkpoint report.
It’s not just flights, either. Many Americans scaled back their summer vacations, opting for shorter, more local, budget-friendly trips.
However, restaurant spending shows a mixed trend. While some consumers are dining out less, others are spending more per transaction and dining out more often.
Spending on big-ticket items like electronics and furniture has remained steady. However, Bank of America notes that some of this stability may be due to consumers purchasing ahead of anticipated tariffs, which could artificially inflate current spending figures.
Meanwhile, essential expenses like property insurance and utilities are on the rise. Consumers appear to be prioritizing necessities over discretionary spending.
At the grocery store, consumers are prioritizing “value” when they make purchases. In June, household grocery spending rose just 0.2% year-over-year — down from 0.8% in May. Month-to-month, spending edged up 0.3%, only partially recovering from earlier drops of 0.2% in April and 0.7% in May.
Retail sales got a modest lift, climbing 0.7% in June, but spending on services — like travel, dining, and leisure — fell 0.1%.
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Who’s spending and who’s struggling?
Not all consumers are feeling the squeeze equally.
Younger Americans, especially Gen Z and millennials, are pulling back on spending more quickly than older generations. Some of this may be tied to labor market vulnerability and financial pressures like high housing costs, student debt, and childcare expenses.
Lower-income households are also under strain. Over the past three months, their card spending declined compared to last year, and their after-tax wage growth is the slowest of any income group.
On the flip side, higher-income households are still spending freely, buoyed by rising wages and more financial cushion.
All of this raises the question of whether another 2008 financial crisis is on the horizon. A three-month slump in services spending might echo patterns seen before the 2008 crisis — but today’s situation is different. Consumers aren’t pulling back across the board; they’re making intentional trade-offs.
Spending on non-essentials like travel and dining is slowing, while spending on necessities continues to grow. Some consumers are skipping trips and cutting back on extras, while others are still swiping freely, thanks to stable jobs and stronger finances.
The takeaway? A widening divide is emerging between those who can keep swiping — and those who can’t. And that’s a trend worth watching.
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This article originally appeared on Moneywise.com under the title: A key category of Americans’ spending is down the past 3 months — that hasn’t happened since 2008. Here’s the situation
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