November 2, 2025

(Yahoo!Finance) - In lieu of official economic data (thanks, government shutdown), we have the Chipotle (CMG) economic indicator.

And if it’s to be believed on an initial pass, we are either in a mild recession or nearing one.

This is The Takeaway from today’s Morning Brief.

The chart of the day

What we’re watching

What we’re reading

Economic data releases and earnings

While I was listening to Chipotle’s earnings call Wednesday night, CEO Scott Boatwright pinned a weak quarter and soft start to the fourth quarter (sales trends worsened versus the third quarter) on the financial troubles of young people.

It makes sense at first glance: AI is ripping through the entry-level job market, and 25-year-olds are still repaying loads of college debt.

“Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback in frequency across all income cohorts,” Boatwright explained. “Since then, the gap has widened, with low to middle-income guests further reducing frequency. We believe that this guest, with household income below $100,000, represents about 40% of our total sales, and based on our data, is dining out less often due to concerns about the economy and inflation. A particularly challenged cohort is the 25 to 35-year-old age group.”

I wasn’t surprised at all by the assessment — Boatwright told me this on the Opening Bid Unfiltered podcast in late August. Still, it’s tough to stomach months later with the market at records and a general view that the consumer is OK.

And that brings me to this perspective.

American Express (AXP) revealed a bang-up third quarter a week ago. CEO Stephen Squeri told me his credit card business is rocking due to millennial spending and sign-ups. He has seen no resistance to Amex jacking up the Platinum Card annual fee to $895 from $695 in October.

Hasbro (HAS) CEO Chris Cocks explained on Opening Bid that digital games have seen increased spending. Revenue for digital increased 42%, led by “Magic: The Gathering” (+55%) and licensed digital gaming (+21%). I fancy young people are the main drivers here, maybe some aging millennials.

Meanwhile, Starbucks (SBUX) said on its call that it saw another quarter of strength at college campuses — thank you, protein cold foam upsells. Its US sales turned positive in October at long last.

In the end, what ails Chipotle may be more Chipotle-specific than a giant red flag on the economy. There are too many other positive indicators on the consumer to suggest the economy is about to fall off a cliff this holiday season. Yes, people are struggling and probably cutting back on burrito takeouts.

But Chipotle has to fix Chipotle so it can do well in every economic situation, or close to it. The feedback I got from Chipotle consumers regarding the above X post was massive — with complaints ranging from higher prices to poor customer experience.

I enjoy eating at Chipotle; the food is great. I acknowledge, though, that it has become pricey and portions have seemed more variable of late.

“Starbucks is really kind of out there talking about their turnaround story. That ‘Back to Starbucks’ reconstruction kind of thing that they’re doing. It’s a $1 billion project that they’re doing,” Crossmark Global Investments chief markets strategist Victoria Fernandez said on Opening Bid. “[At] Chipotle, you’re not seeing that same type of innovation.”

“You’re not seeing the protein drinks or an equivalent of a protein drink at Chipotle, something new that’s there. Yes, they have certain meats that they bring in certain times of the year, but it’s really not anything new. And I think you’ve got a lot more competition there too.”

Similar to many consumers right now, Fernandez isn’t a buyer of Chipotle — at least not the stock on the severe pullback.

Brian Sozzi · Executive Editor November 2, 2025