Macro Monday: Consumer Velo Softer Again / Our Premium-Value Net Index Moves More Sharply Away from Premium (11/17/25)

By David Schick and Jonathan Feeney and David Katzman and Jack Hermann Published on November 17, 2025 PDF

Consumer Velo continues to show further softening. Shorter-term spending trends decelerated further last week, now running up less +0.9% y/y (1.2 standard deviations below average since the start of 2022). The longer-term trend is running up +1.8% y/y, leading to a shorter vs. longer-term inflection of -0.9% (0.4 standard deviations below average), the 12^th straight week of shorter-term trends running below longer-term trends. See Fig 1-2.

Premium vs Value Monitor continues to diverge, trend towards Value. We use a combination of consumer spending and psychographic monitoring. Optimal’s premium monitor is running down -2.0% y/y on a T4W basis and up +0.4% y/y on a T12W basis, running 470 bp (1.1 standard deviations below average) and 250 bp (0.9 standard deviations below average) respectively below our Value Monitor, which is running up +2.8% y/y on a T4W basis and +2.9% y/y on a T12W basis. See Fig 3-6.

Housing kinetic energy is positive as mortgage activity is higher and rates move lower. US 30Y FRM rate is running down -50bps y/y on a T4W basis. MBA’s mortgage applications for purchase is currently running +31% y/y, this is an important potential driver. Inventory available for sale continues to run up +13.9% y/y but has decelerated from +30% y/y in May of this year. Median home prices are running up +2.4% y/y (1.1 standard deviations below average since 2020), consistent with recent trends. Roughly 18% of Americans sell, build, fix, lend to, and furnish homes – velocity matters for the economy. See Fig 7-10.

Gas Prices slight y/y declines persist, but with less net consumer tailwind than prior. Gas prices ran down -1.2% y/y on a T4W y/y basis and declined -1.8% y/y on a T12W y/y basis, corresponding to a +0.6% inflection between shorter and longer-term trends (approximately average relative to historical trends), the 14^th straight week of positive inflections. See Fig 11-12.

Consumer Sentiment is substantially lower y/y across incomes – just the 4^th time this magnitude of y/y pullback has occurred since 1980. Headline Sentiment has declined -25% y/y on a T3M basis (2.1 standard deviations below average) and -22% y/y on a T9M basis (also 2.1 standard deviations below average). Upper-third income Sentiment has declined -28% y/y on a T3M basis (2.0 standard deviations below average), middle-income Sentiment has declined -25% y/y on a T3M basis (2.0 standard deviations below average), and lower-income Sentiment has declined -25% y/y on a T3M basis as well (2.2 standard deviations below average). See Fig 13-16.

Wealth Effect Index trend remains above mean on y/y basis, with first derivative now measurably slowing. Optimal Advisory’s Wealth Effect Index is currently at 14.3% y/y (0.3 standard deviations above its mean value since the start of 2022) after peaking at 15.4% in late September. See Fig 17-20.

In this weekly note, we focus on key changes in the US consumer’s real-time dynamics. We also present how “non-normal” current dynamics are, relative to historic patterns. See Fig 21 for sector market performance.

Figures 1-2: Optimal Advisory Consumer Velocity Monitor

Source: Optimal Advisory Analysis, Bloomberg Second Measure

Consumer Spending y/y Relative to Historical Average

Source: Optimal Advisory Analysis, Bloomberg Second Measure

Figures 3-6: Optimal Advisory Premium vs Value Monitor

Source: Optimal Advisory Analysis, Bloomberg Second Measure, Google Trends

Optimal Advisory Premium vs Value Indices Relative to Historical Averages

Source: Optimal Advisory Analysis, Bloomberg Second Measure, Google Trends

Figures 7-10: Housing Kinetic Energy

Source: Optimal Advisory Analysis, Freddie Mac, Zillow, Redfin

Mortgage Rates, For Sale Inventory, & Median List Price y/y Relative to Historical Averages (Since 2020)

Source: Optimal Advisory Analysis, Freddie Mac, Zillow, Redfin

Figures 11-12: Gas Prices y/y

Source: Optimal Advisory Analysis, U.S. Energy Information Administration

Gas Prices y/y Relative to Historical Averages (Since 1992)

Source: Optimal Advisory Analysis, U.S. Energy Information Administration

Figures 13-16: Consumer Sentiment T3M and T9M y/y

Source: Optimal Advisory Analysis, University of Michigan Consumer Survey

Sentiment y/y by Income Tercile Relative to Historical Averages

Source: Optimal Advisory Analysis, University of Michigan Consumer Survey

Comparison of Sentiment y/y Across Income Terciles

Source: Optimal Advisory Analysis, University of Michigan Consumer Survey

Figures 17-20: Wealth Effect

Wealth Effect Index & Components

Source: Optimal Advisory Analysis, Bloomberg, Zillow, Redfin

Median Home Price y/y, S&P 500 y/y, & Wealth Effect Index (Since 2022)

Source: Optimal Advisory Analysis, Bloomberg, Zillow, Redfin

Figure 21: Index & Sector Performance

Source: Optimal Advisory Analysis, Bloomberg, prices intraday 11/17/2025

DISCLOSURES AND DISCLAIMERS

Analyst Certification

The analyst primarily responsible for the preparation of this report attests to the following: (1) that the views and opinions rendered in this report reflect his or her personal views about the subject companies or issuers; and (2) that no part of the analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this report.

Analyst Certifications And Independence

Each of the Optimal Advisory analysts whose names appear on the front page of this report hereby certify that all the views expressed in this Report accurately reflect our personal views about any and all of the subject securities or issuers and that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views of in this Report.

Optimal Advisory (the “Company”) is an independent equity advisory provider. The Company is not a member of the FINRA or the SIPC and is not a registered broker dealer or investment adviser. Optimal Advisory has no other regulated or unregulated business activities which conflict with its provision of independent advisory work.

Limitations Of Research And Information

This Report has been prepared for distribution to only qualified institutional or professional clients of Optimal Advisory. The contents of this Report represent the views, opinions, and analyses of its authors. The information contained herein does not constitute financial, legal, tax or any other advice. All third-party data presented herein were obtained from publicly available sources which are believed to be reliable; however, the Company makes no warranty, express or implied, concerning the accuracy or completeness of such information. In no event shall the Company be responsible or liable for the correctness of, or update to, any such material or for any damage or lost opportunities resulting from use of this data.

Nothing contained in this Report or any distribution by the Company should be construed as any offer to sell, or any solicitation of an offer to buy, any security or investment. Any research or other material received should not be construed as individualized investment advice. Investment decisions should be made as part of an overall portfolio strategy and you should consult with a professional financial advisor, legal and tax advisor prior to making any investment decision. Optimal Advisory shall not be liable for any direct or indirect, incidental or consequential loss or damage (including loss of profits, revenue or goodwill) arising from any investment decisions based on information or research obtained from Optimal Advisory.

Optimal Advisory may receive consulting or other compensation from securities mentioned but is not related to any recommendation in this report.

Reproduction And Distribution Strictly Prohibited

No user of this Report may reproduce, modify, copy, distribute, sell, resell, transmit, transfer, license, assign or publish the Report itself or any information contained therein. Notwithstanding the foregoing, clients with access to working models are permitted to alter or modify the information contained therein, provided that it is solely for such client’s own use. This Report is not intended to be available or distributed for any purpose that would be deemed unlawful or otherwise prohibited by any local, state, national or international laws or regulations or would otherwise subject the Company to registration or regulation of any kind within such jurisdiction.

Copyrights, Trademarks, Intellectual Property

Optimal Advisory, and any logos or marks included in this Report are proprietary materials. The use of such terms and logos and marks without the express written consent of Optimal Advisory is strictly prohibited. The copyright in the pages or in the screens of the Report, and in the information and material therein, is proprietary material owned by Optimal Advisory unless otherwise indicated. The unauthorized use of any material on this Report may violate numerous statutes, regulations and laws, including, but not limited to, copyright, trademark, trade secret or patent laws.

Additional Information is available upon request.

For more information on receiving Optimal Advisory, email: [email protected]