Signs Point to Strained Consumers as Government Shutdown Continues

For those under a rock, the federal government shutdown has become the second-longest in history, and the lack of progress means it is shaping up to potentially become the longest.

Expectations now suggest the shutdown could last into November, but there is also some thought we could see some thawing in negotiations to reopen the government once we move past November 1. That’s when open enrollment for the Affordable Care Act (ACA), better known to some as Obamacare, begins, and millions of Americans will begin shopping for their 2026 health coverage plans.

Rising Healthcare Costs

Here's the thing: If ACA subsidies are not extended by November, healthcare.gov consumers could experience sticker shock when they start searching for their healthcare plans.

If you’re thinking that could pressure overall consumer spending, we agree, but the reality is it would only continue the growing pressure of rising healthcare costs that consumers have been facing. Findings in an annual survey conducted by health policy nonprofit KFF are already taking a bite out of consumer wallets. Data from the KFF survey also showed that premiums for family coverage have been rising more quickly than wages since 2015, except for the pandemic years of 2021 and 2022.

Mounting Auto Loan Delinquencies and Repossessions

At the same time, we are seeing other signs of consumer stress, particularly for lower-income consumers.

A recent study by VantageScore found that auto loan delinquency rates have increased by more than 50% over the past 15 years. VantageScore also found that the average loan amount has increased 57% over the last 15 years — a bigger jump than any other loan category, including mortgages. One in five new car loans has monthly payments that exceed $1,000, according to auto researcher Edmunds.

The number of cars is being repossessed as Americans continue to fall behind on their auto loans amid mounting financial strain. Data from the Recovery Database Network (RDN), analyzed by CURepossession, has seen over 7.5 million repossession assignments — authorizations given to an agency to recover a vehicle on behalf of a lender. Based on historic trends, that figure is expected to reach a record 10.5 million by the end of the year.

The way we see it, the greater the pressure on consumer spending power, the more inclined consumers, especially low to middle-income ones, will be to stretch the spending dollars they do have to make ends meet.

Stocks & Markets Podcast Brings Different Perspective

When we analyzed Visa’s (V) September Spending Momentum Index, we found consumers spent more in Q3 2025 compared to Q3 2024. However, the index did not offer any insight when it came to price and inflation versus volume. What we know is that consumers spent more. In this week’s "Stocks & Markets" podcast, we talk with Sender Shamiss, CEO of Return Pro, a returns solutions company that counts Walmart (WMT) as one of its many customers. As you’ll hear, Shamiss offers a more bullish take on the consumer.

We’ll revisit his perspective when we dig into quarterly results from Visa on October 28 and Mastercard (MA) on October 30. As we do that, we’ll be examining average transaction size and frequency, but also debit versus credit transactions, as well as color on what consumers are buying.

Based on what we’ve seen so far, and we move we move into the holiday shopping season, we remain bullish on shares of TJX (TJX) , Costco (COST) and Amazon (AMZN) . We also like our positioning with mid-to-upper income consumers, as well as those who take advantage of the membership perks found with American Express (AXP) . On the travel front, we’ll be interested in comments from Hilton (HLT) and Travel & Leisure (TNL) when they report on Wednesday morning.

Coming Up

Coming up on Wednesday, we have the podcast conversation I mentioned above, but we will also be reviewing the upside guidance issued last night by Construction Partners (ROAD) and what it means for our shares of United Rentals (URI) and Vulcan Materials (VMC) .

Texas Instruments (TXN) shares are falling, but its comments about data center and communications equipment chip demand support our positioning.

Waste Connections (WCN) served up an earnings report that spoke to several reasons why we are owners of Waste Management (WM) shares: disciplined pricing, efficiency gains and tight cost management.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long TJX, COST, AMZN, AXP, URI, VMC and WM.