As economic uncertainty looms, a close watch on U.S. consumer behavior—particularly dining habits—can offer critical insights into the financial health of households. Restaurant foot traffic, spending trends, and industry employment serve as barometers for broader economic sentiment, and the latest data reveals a mixed picture.
Consumer Dining Trends Reflect Economic Hesitation
Recent data shows a decline in restaurant spending during the first two months of 2025, with a slight rebound in early March. Aggregated credit and debit card transaction data indicate a pullback in discretionary spending, as consumers grow wary of inflation and broader economic challenges. Despite seasonal fluctuations, restaurant sales are often an early indicator of economic slowdowns, as seen in the lead-up to the 2008 financial crisis.
Foot traffic at restaurants declined year over year through early March, according to Placer.ai, while employment in the sector saw a sharp reduction in February. These factors raise concerns about whether consumer spending will continue to wane in the coming months.
Spending Patterns and Inflation Expectations
The latest University of Michigan consumer sentiment index reported an 11% decline from February to March, reaching its lowest level since 2022. This dip coincides with a rise in inflation expectations, with short-term projections climbing to 4.9% and long-term expectations hitting their highest level since 1993 at 3.9%.
Bank of America data further supports this cautious outlook, with credit and debit card spending per household down 2.3% in February compared to a 1.9% increase in January. Meanwhile, Visa’s Spending Momentum Index fell by approximately 2% month over month in February, reinforcing concerns about weakening consumer confidence.
Diverging Trends in Restaurant Segments
Not all restaurant categories are experiencing equal declines. Full-service restaurant sales have fallen year over year, while fast-casual and fast-food establishments have seen modest improvements. Bloomberg data indicates that spending among higher-income households has remained more resilient, while lower and middle-income consumers have cut back on dining expenditures.
Despite these challenges, overall consumer spending among middle- and higher-income households has increased by about 2% in 2025, according to Bank of America data. This suggests that wealthier consumers continue to drive discretionary spending, albeit at a slower pace than in previous years.
Upcoming Economic Indicators to Watch
The U.S. Census Bureau is set to release its February retail sales report, which includes insights into food service spending, on March 17. This report, along with continued credit and debit card transaction analysis, will provide a clearer picture of whether restaurant spending is rebounding or further contracting. Additionally, seasonal factors such as Easter timing and comparisons with last year’s leap year may influence consumer behavior in the coming months.
With the stock market volatility, inflation pressures, and evolving consumer sentiment, tracking restaurant spending trends remains essential for understanding the trajectory of the U.S. economy. Future data will determine whether the current dip in restaurant spending is a temporary fluctuation or a more profound signal of broader financial caution.
