Trying to assess the health of the U.S. consumer has become increasingly complicated — not because traditional data has disappeared, but because a growing share of lending is now happening outside the banking system.
Private credit is rapidly scaling into consumer finance, funding everything from personal loans to buy-now-pay-later products. Recent estimates suggest that newly announced private-credit facilities could support nearly $140 billion in consumer lending over the next few years — a dramatic shift from the single-digit billions seen just a year ago.
This migration matters. Traditional indicators — bank credit-card performance, regulatory data, or public loan pools — now capture a smaller and more selective slice of borrowers. Many banks have shifted toward higher-credit segments, leaving alternative lenders to serve consumers who may have fewer borrowing channels. That can help sustain spending, but it also makes the credit landscape more fragmented and harder to track.
This segmentation helps explain some of the conflicting signals: stable credit metrics in the banking system on one side, alongside retailers reporting more value-hunting and signs of financial strain on the other. These groups may increasingly represent different households.
Broader measures still show resilience — spending growth for lower-income households has slowed, but cash balances remain above pre-pandemic levels in real terms. Even so, the opacity created by this shift, combined with data lags from recent shutdown disruptions, means the risk of being surprised in 2026 should not be dismissed.
In an environment where more consumer credit is funded privately and disclosed less frequently, uncertainty itself becomes a macro factor.
Arnab Pandey 