Is the U.S. consumer market flashing red? CEOs from several major companies are warning in unison that low-income groups are running out of money.

For years, American consumers have served as the backbone of economic resilience. Even with high inflation, rising borrowing costs, and continuously increasing living expenses, household budgets have managed to hold up. However, recently, executives from several leading companies have spoken out, warning that this consumer momentum may be approaching a critical point. Signs of consumption fatigue are beginning to emerge: demand across the board is under pressure, from food to home appliances. Steve Cahillane, CEO of Kraft Heinz Company (KHC.US), has given a blunt assessment of the financial pressures faced by low-income individuals. In an interview in May, he stated, They are really running low on funds by the end of the month. We see negative cash flow among low-income groups, forcing them to dip into savings to cover daily expenses. As the parent company of renowned brands like Heinz, Kraft, and Philadelphia, Kraft Heinz Company has begun to lower prices on some over-priced products, ramp up promotions, and introduce smaller, lower-priced packaging to cater to budget-conscious consumers. Cahillane added that the industry has experienced "declining sales" for several consecutive years, primarily due to consumers being forced to absorb "too many price increases." He warned that if there are new rounds of price hikes, it would further squeeze already tight household budgets. We might see more significant inflation, and no one wants to see that situation, he remarked. Cahillane is not alone. Chris Kempczinski, CEO of McDonald's Corporation (MCD.US), similarly pointed out that consumers are under pressure and mentioned increasing "anxiety." Company CFO Ian Borden further noted the evident impact of rising oil prices on low-income families, which have noticeably cut back on spending, while high-income customers have shown greater resilience. Marc Bitzer, CEO of appliance giant Whirlpool (WHR.US), also described a sharp decline in demand for major appliances, with North America President Juan Carlos Puente going as far as to characterize the current situation as recession-level industry contraction, stating that discretionary spending has dropped by about 15%. Credit card and savings rates send warning signals: the cost of living crisis is far from over. Beyond corporate earnings, various macroeconomic data corroborate that financial pressure on American households is intensifying. By the first quarter of 2026, U.S. credit card outstanding balances are projected to reach $1.25 trillion, and auto loan balances are expected to climb to $1.69 trillion. Meanwhile, the willingness to save among residents continues to decline, with the personal savings rate falling to just 2.7% in June. The latest Report on Economic Well-Being of U.S. Households published by the Federal Reserve paints an even clearer picture: 16% of adult respondents indicated that they could not pay all their bills in full last month; among those who struggled to make full payments, 42% had been overdue at least once. In summary, not all Americans are facing "exhausted resources," but families with the thinnest financial cushions are increasingly losing their ability to withstand rising costssome are now forced to rely on credit or savings to maintain daily expenditures. Although the overall inflation rate has fallen from the highs experienced during the pandemic, the real impact of the cost of living crisis on consumers persists. According to the U.S. Bureau of Labor Statistics, food prices have risen by more than 33% since early 2020, housing costs have increased by about 33%, and energy prices have surged by over 42%. It is worth noting that even if the inflation rate slows, previously accumulated price increases will not "recede"; higher prices have become the "new baseline" for household budgets. This means that ordinary families' capacity to deal with unexpected expenses or build savings has been further squeezed. According to the Minneapolis Fed's inflation calculator, the purchasing power of $100 today is equivalent to just $11.74 in 1970. For those already struggling, the ongoing loss of purchasing power makes it even more challenging to build emergency reserves, pay off debts, or invest for the long term. Anti-inflation strategies Historically, investors have always found effective ways to hedge against the erosion of inflation and protect long-term purchasing power. The following two types of assets have stood the test of market cycles and are worthy of attention. Goldan eternal safe-haven asset In terms of wealth preservation and anti-inflation, gold is one of the few assets that has withstood the test of time. Its appeal is simple and direct: unlike fiat currency, gold cannot be arbitrarily printed by central banks. Furthermore, gold is seen as the ultimate safe-haven toolit is not tied to any single country, currency, or economy, and during times of economic turmoil or heightened political uncertainty, investors often flock to the gold market, driving up its price. Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, has repeatedly emphasized the defensive role of gold in an investment portfolio. He stated last year, People typically do not hold enough gold in their portfolios. When markets face headwinds, gold is a very effective risk diversification tool. Despite a recent pullback in gold prices, they have still increased by over 30% in the past 12 months. U.S. real estatean inflation-resistant cash flow tool Beyond gold, U.S. real estate has also proven to be a strong inflation hedge. When inflation rises, driven by costs for materials, labor, and land, property values tend to increase as well; simultaneously, rental income usually adjusts with inflation, providing landlords with cash flow linked to price levels. For instance, over the past decade, the S&P CoreLogic Case-Shiller National Home Price Index has surged by 88%, reflecting strong demand and limited supply. The American consumer engine is showing signs of fatigue, and financial cushions for lower-income households are becoming increasingly thin. For investors, inflation is not a short-term phenomenon but a persistent structural challenge. Drawing from history, a rational allocation of physical assets such as gold and real estate may yield favorable investment returns in this macroeconomic context.