Economist Peter Schiff isn't buying the argument that Americans are spending freely because they feel great about the economy. In a post on X, Schiff said consumers are "borrowing because they're broke," directly challenging Kevin Hassett, director of the White House National Economic Council, who had pointed to strong consumer spending as proof of a resilient economy, even as Americans save less.

Schiff wrote that "confidence is at a record low," and that "consumers are spending more because stuff costs more, and they're borrowing because they're broke."

Hassett Defends Strong Consumer Spending

Hassett made his case on Fox Business' "Varney & Co." on Wednesday, calling the gap between consumer confidence and spending "a puzzle that we're noodling about every day ourselves."

He pointed to strong capital spending, factory construction and consumer demand. Hassett said bank executives told him customers are continuing to make purchases rather than falling behind on payments.

Hassett said worries about job security can weigh on confidence even when spending holds up, and predicted a strong holiday shopping season. "My view is that the strength of the economy is visible," he added.

Strong Spending, Weak Confidence

Earlier this month, Hassett told CNN's Jake Tapper that strong consumption and retail activity were "radically inconsistent with the polls," which showed Americans dissatisfied with the economy.

Personal consumption expenditures rose 0.9% in August, according to the Commerce Department. Retail sales rose 0.8% in September versus the 0.3% economists expected. The Bureau of Labor Statistics reported Thursday that producer prices rose 1.3% month over month in September versus 0.5% expected.

Ed Yardeni, president and chief investment strategist at Yardeni Research, has argued that older Americans' accumulated wealth may be helping sustain spending while younger households face greater financial pressure.

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