For the last several years I’ve been using real spending at fast food restaurants as a gauge for assessing how the non-rich are feeling about their personal finances. The logic is that it is a type of discretionary spending where people can easily make cutbacks if they are feeling squeezed.
Also, it should not be affected much by the spending of the rich. It’s not likely that Elon Musk eats more Big Macs when his wealth increases or he cuts back when SpaceX’s stock plunges.
And to be clear, I’m not saying the rich don’t eat fast food. I’m sure they do. The claim is just that their consumption of fast food is not affected much by changes in their short-term financial situation.
Anyhow, the story the index has been telling us in the last year is not a good one.
After rising at a healthy pace through 2023 (the January number was an upward blip), spending had been largely flat through 2024 and the first half of 2025. It then rose in the summer and peaked at an annual rate of $386.2 billion in September. Since then, it has fallen sharply, hitting $366.8 billion in May, a decline of just over 4.0 percent from its peak.
That would seem to indicate that people are feeling pretty bad about their economic situation. This is consistent with the bad numbers being reported in the consumer confidence indexes.
I’ve had people suggest to me that this decline could be driven by the increased use of Ozempic or related drugs. This would be a positive spin, since it would probably be good for people’s health if they consumed less fast food.
Unfortunately, that does not seem likely to explain this sort of decline. By 2024, 12 percent of the adult population was already taking a GLP-1 drug. The increase in usage did not prevent fast-food consumption from rising rapidly in 2023 and at least staying flat in 2024.
The number of people using these drugs has undoubtedly continued to rise, but probably not by enough to explain the sharp drop in consumption over the last 8 months. The drop in spending is likely giving us bad news about the state of the economy, not good news on public health.
People’s negative assessments of the economy continue to be somewhat of a mystery. The recent run-up in gas prices, and inflation more generally is unambiguously bad news but is this the worst economy ever, as some of the consumer confidence measures have been showing? Real income for those at the middle and bottom has generally been rising by standard measures, so it seems that we’re missing something, and I’m not sure any of us have figured out what.
Anyhow, the fast-food index is telling us what people do and not just what they say. And what they do is telling us that they don’t feel very good about the economy.
This first appeared on Dean Baker’s Beat the Press blog.
