While many Americans are worried about where the U.S. economy is heading, few have changed their spending habits in anticipation of a slowdown.

Nearly three-quarters, or 73%, of adults said they are “financially stressed,” with most pointing to the tariff wars as the culprit, according to a recent CNBC/SurveyMonkey online poll.

And yet, consumer spending has remained remarkably resilient.

In part because of looming tariffs, shoppers are panic buying. In fact, consumer spending was even stronger than expected in March, according to the Commerce Department and ticked up again in April, data released Wednesday from J.P. Morgan showed.

J.P. Morgan also raised its odds for a U.S. and global recession to 60%, by year end, up from 40% previously.

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In a speech earlier this month before business journalists in Arlington, Va., Federal Reserve Chair Jerome Powell said “the economy is overwhelmingly driven by consumer spending.” Powell also said that he expects President Donald Trump’s tariff policies to raise inflation and lower growth.

Most experts agree that in the face of higher prices for many consumer goods, Trump’s tariffs are igniting a fresh wave of declining sentiment, which plays a big part in determining where the economy is headed.

The Conference Boards’ expectations index, which measures consumers’ short-term outlook, plunged to its lowest level in 12 years and well below the recession threshold, signaling heightened recession risk. The University of Michigan’s consumer survey also showed sentiment sank by more than 30% since December among persistent worries of a trade war.

“On-again, off-again rising tariffs and resulting turmoil in the stock market and world economy are clearly impacting consumer concerns about higher prices and future consumer spending growth,” Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement.

The Trump administration’s tariffs on a host of other countries are currently in the middle of a 90-day pause, with a 10% baseline tariff rate instead applying to all imported goods across the board. The pause is due to expire on July 9, with Trump touting a series of rate negotiations with foreign leaders between now and then.

According to an analysis by the Urban-Brookings Tax Policy Center, if the lower tariff rates in effect during the 90-day pause remain in effect permanently, it could reduce real income for the average taxpayer by about $3,100 in 2026. A separate study by the Budget Lab at Yale estimates that tariffs could cost the average household roughly $3,800 per year.

“Household budgets remain under pressure and highly sensitive to further price increases,” said Greg McBride, chief financial analyst at Bankrate. “Inflation will continue to be central to how consumers feel about their finances, and their capacity for additional spending.”

At that point, consumers will have to reign in their spending, whether they want to or not, she said, which could lead to an economic drop-off in the months ahead. That prediction was also recently shared by JPMorgan analysts in a research note on Wednesday and Federal Reserve Bank of Chicago President Austan Goolsbee on Sunday.

“We should be worried,” Indarte said.  

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Typically, you should avoid selling assets when the stock market is down, especially during earlier retirement years. Those early withdrawals paired with market dips can stunt your long-term portfolio, known as the “sequence of returns risk.”

Negative returns are more harmful early in retirement than later because you could miss more years of compound growth, according to a 2024 report from Fidelity Investments.

That’s why flexibility is important when it’s time to pull funds from your retirement savings, Caswell said. 

Caswell recommends a bond ladder of Treasuries that mature every six months or one year for up to five years. You can also use the ladder method with certificates of deposit. 

As assets mature, you can use the proceeds to cover living expenses. Alternatively, you could reinvest part of the cash if you receive more than you need, he said.

The strategy provides “more transparency and control” of when you’re taking money out of that part of your portfolio, Caswell said.

You could also weigh a ladder of so-called Treasury inflation-protected securities, or TIPS, according to Amy Arnott, a portfolio strategist with Morningstar Research Services.

Issued and backed by the U.S. government, TIPS can provide a hedge against inflation because the principal rises or falls based on the consumer price index. 

“Inflation and loss of purchasing power can be a risk with bonds, which is why a TIPS ladder can be attractive,” especially when you’re able to get a positive return, she said.

In some California cities, it’s common for parents to have roommates: their adult children.

Three California metro areas host the highest shares of 25- to 34-year-olds living in a parent’s home relative to other U.S. metros, according to a new analysis by Pew Research Center, a non-partisan research organization.

In the Vallejo and Oxnard-Thousand Oaks-Ventura metros, 33% of young adults were living with their parents in 2023, Pew found. (Those metros are in the San Francisco Bay Area and outside Los Angeles, respectively.)

In El Centro, east of San Diego near the U.S.-Mexico border, 32% of young adults live at home, according to Pew.

Those shares are significantly higher than the 18% U.S. average. In some metros, the share is as low as 3%.

Young adults can save about $13,000 a year by living with their parents, according to a 2019 Federal Reserve analysis. About half of those savings — $6,400 — is from housing and utility costs, it found.

Nationally, 50% of parents with a child older than 18 provide them with some financial support, averaging $1,474 a month, according to Savings.com.

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“Areas where there are more minority young adults tend to have more young adults living at home,” Fry said. “That’s not always the case, but it is a pattern.”

Black and Hispanic young adults are less likely to have a college degree and tend to have lower earnings as a result, Fry said.

“Being able to live independently may be more of an issue for them,” he said.

The typical Black or Hispanic worker, age 25 to 34, earned about $46,000 a year in 2022, according to the National Center for Education Statistics. The typical white young adult worker earned $58,000.

Part of the reason may also be cultural, Fry said. There are likely other factors at play like cost of living, though the correlation isn’t as strong, he said.

Many of the metros with low shares of young adults living at home are college towns, Fry said.

For example, Ithaca, New York, hosts Cornell University, and Bloomington, Indiana, has Indiana University, Fry said. Many young adults here are likely university graduates who are well-educated and opt to stay there after they graduate instead of moving home, he said.

Nationally, the share of young adults living at home climbed starting in the early 2000s, peaking at 20% in 2017, according to Pew. (It declined to about 18% in 2023.)

Unemployment spiked during the Great Recession and it took many years for the labor market to heal, Fry said. Meanwhile, young adults today are more likely than older generations to be saddled with student debt.