Watches, movies and burrito taxis: How Americans splurge in a vibecession

Americans feeling pinched financially are splurging on small treats while economic anxiety and inflation jitters put off larger purchases.

Why it matters: From movie tickets to collectible watches, those affordable indulgences are helping sustain consumer spending.

• The economy remains in what some economists call a "vibecession," where consumers feel relatively stable personally while pessimistic about the broader economy.
• Consumers feel caught between a "combination of rising inflation, slowing after-tax real incomes, and rising credit card debt," Wayne Winegarden, a senior fellow in business and economics at Pacific Research Institute, tells Axios.
• In a K-shaped economy, the wealthy can still indulge while lower-income consumers pull back and sate themselves with smaller purchases, economists say.

State of play: Winegarden expects lower-income households to opt for movies or staycations this Memorial Day weekend as economic conditions tighten.

• Theaters have a national ticket average of $10.75 and $14–$20 for IMAX and premium formats, per LatestCost estimates, making them a wallet-friendly splurge.
• Movies are also leaning into premium experiences to give visitors more for their dollar, Kent Fung, vice president at Fundstrat Global Advisors, wrote in a note.

Yes, but: At the higher end of the market, Fung noted "one theater chain quickly sold out of eyepoppingly expensive $50 tickets for a premium opening-night experience" to see the upcoming "Dune: Part Three."

Other vibecession winners include food-delivery services like DoorDash, which reported a 27% year-over-year increase in orders in the first quarter.

• Hobbies and collectibles are in demand — notably a limited-edition, pop art-inspired pocket watch that drew large crowds to Swatch stores in New York, the United Kingdom and France.

Zoom out: Economists have often referred to small splurges in tough economic times as the "lipstick index," and personal care products are seeing a boost from consumers' anxieties.

• L'Oréal, the world's largest beauty company and owner of high-end brands such as YSL Beauty and Urban Decay, reported that first-quarter beauty product sales rose 6.7%.
• Affordable luxury fashion and accessories are selling well. Sofia Baig, a senior economist at Morning Consult, tells Axios that households with incomes over $100,000 increased spending on apparel by 16% over the past six months, while those earning less than $50,000 cut it by 6%.

What we're watching: Rising oil prices tied to the Iran conflict are threatening to hit summer travel as jet fuel and gas prices remain elevated in an energy crisis experts warn could last months.

• For now, travel spending remains strong across the board, Baig says.

Zoom in: Morning Consult's Consumer Health Index indicates that high-income consumers' spending has retreated somewhat since the Iran war triggered a gas price spike.

• However, it remains "elevated historically" among this demographic, Baig says.
• Pacific Research Institute analysis released after the Consumer Price Index rose 3.8% in the 12 months through April shows that if current levels persist, it would cost families an extra $1,100-plus in annual energy expenditure in 2026 compared to the same period last year.

Go deeper: Early signs of consumer angst in April's retail sales report