Next week, there will be survey data on how consumers say they’re feeling about inflation and the economy. Of course, we can also get a sense of how consumers are feeling by looking at what they’re doing.

Specifically, what they’re spending their money on. 

First, let’s look at fast food places. Dean Baker at the Center for Economic and Policy Research said it’s the right place to start. 

“If you look at fast food restaurants, that's likely reflecting what's going on with ordinary workers,” Baker said.

So not people with high incomes or stock portfolio or real estate gains to fall back on. Baker observes that fast food spending isn’t what it used to be.

“What happens into ‘24 and then into this year, it really slows down, it basically stagnates,” Baker said.

In response, chains are making moves to draw in more traffic.

“Offer discounts, add cheaper items to the menu, things of that nature to kind of attract people to come in. You're not going to see much menu price decreases in this business,” said Michael Halen at Bloomberg Intelligence.

Because — between inflation and labor costs, margins are tight.

In surveys and at conferences, restaurants report that deals bring in about a quarter or so of their traffic, said Sara Senatore at Bank of America.

“What's really been the driver of transactions, though, have been more, I would say innovation and brand activation,” Senatore said.

Innovation like Minecraft Happy Meals and Chipotle’s adobo ranch dip. Senatore sees parallels with 2009, during the Great Recession with one key difference: 

“Full-service restaurants have actually been holding up better, that kind of runs counter to what you would typically expect to see in a period of economic stress,” Senatore said.

Which she attributed — in part — to those higher income customers. Welcome to the K-shaped economy.