April nonfarm payrolls came in at 115,000 — nearly double the 55,000 consensus estimate. Jobless claims stayed near a 57-year low. Consumer sentiment just broke its own all-time record low at 48.2. Affirm’s CEO says the American consumer is “unbelievably resilient.” And OppFi’s tax refund story tells you exactly what happens when a subprime borrower gets a cash infusion. Five data points. One picture.
Five data points landed today that together describe the consumer credit environment more precisely than any one of them does alone. The labor market beat expectations by nearly double. Jobless claims stayed near a 57-year low. Consumer sentiment broke its own all-time record low — again. Affirm’s CEO called the American consumer “unbelievably resilient” on national television. And OppFi disclosed something that almost nobody covered: higher-than-expected tax refunds reduced subprime loan demand in Q1 — a data point that tells you exactly what happens when a cash-strapped borrower gets a windfall. Here is the full read.
The Bureau of Labor Statistics released the April Employment Situation this morning. Total nonfarm payrolls rose by a seasonally adjusted 115,000 — well above the 55,000 Dow Jones consensus and nearly double the 62,000 ADP print from Wednesday. The unemployment rate held at 4.3%. Average hourly earnings rose 0.2% for the month and 3.6% year-over-year — both below the 0.3% and 3.8% estimates respectively.
Sector breakdown: healthcare led with 37,000 new jobs, transportation and warehousing added 30,000, retail trade 22,000. Federal government shed 9,000. Information technology lost 13,000. Manufacturing declined 2,000 despite the $1.5 trillion in announced reshoring investment commitments. Prior revisions were mixed: March revised up 7,000 to 185,000, February revised down 23,000 to a loss of 156,000 — combined, 16,000 lower than previously reported.
The broader U-6 unemployment measure — including discouraged workers and involuntary part-timers — rose to 8.2%, up 0.2 percentage points. The labor force participation rate fell to 61.8%, the lowest since October 2021. Involuntary part-time workers surged 445,000 to 4.9 million. Chicago Fed President Austan Goolsbee summarized it accurately: “Pretty much stable for a year, year and a half.”
Thursday’s initial jobless claims showed 200,000 for the week ended May 2 — up 10,000 from the prior week’s near-historic 190,000 but below the 205,000 consensus and firmly under the recent trend. Continuing claims fell 10,000 to 1.766 million, the lowest since January 2024. FWDBONDS chief economist Christopher Rupkey was direct: “There is no reason to consider interest rate cuts whatsoever because the labor market is steady as a rock.” Despite a wave of publicly announced AI-related layoffs from major technology firms, initial claims have not broken above 230,000 all year — the announced cuts are either not materializing at the reported scale, or are being absorbed through attrition rather than formal separations.
The University of Michigan’s preliminary May Consumer Sentiment Index released this morning at 48.2 — down from April’s final reading of 49.8 and below the 49.5 consensus estimate. It is the lowest reading in the survey’s history, which dates to November 1952. April was previously the record low. May just broke it.
The current conditions index fell approximately 9%, described by survey director Joanne Hsu as driven by “a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases.” One-third of respondents spontaneously mentioned gasoline prices as their primary concern. Another third cited tariffs. Year-ahead inflation expectations softened slightly to 4.5% from April’s 4.7% — still the highest sustained level since 2022. Five-year inflation expectations eased to 3.4% from 3.5%.
The directional message from Hsu is the most important element of the report: “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.” A ceasefire that doesn’t reopen the Strait of Hormuz and doesn’t lower gas prices does not restore consumer confidence. The survey makes that explicit.
Affirm reported fiscal Q3 2026 results Thursday evening that beat estimates on every headline metric. Gross merchandise volume of $11.6 billion, up 35% year-over-year. Total revenue of $1.039 billion, up 33%. Net income of $103 million — a sharp turnaround from a loss a year ago. Adjusted operating income of $281 million at a 27% margin. Active consumers grew 22% to 26.8 million. Transactions per active consumer rose 20% to 6.7. The Affirm Card drove direct-to-consumer GMV up 48% to $3.7 billion, with card-specific volume surging 146% and active cardholders reaching 4.4 million. Full-year fiscal 2026 guidance raised to GMV of $49.3–$49.6 billion and revenue of $4.175–$4.205 billion.
CEO Max Levchin told CNBC’s Mad Money Friday morning: “The American consumer is unbelievably resilient.” On the earnings call, when asked directly whether delinquency trends or private credit stress were creating problems, Levchin separated Affirm’s borrowers from the broader consumer market precisely: “At this point, I think we’ve earned the right to say the Affirm consumer — and so these are not comments on the universe or even North America or United States consumer, but people that we choose to underwrite — we are not seeing deterioration.” The 30-plus-day delinquency rate on US monthly installment loans was 2.8% at March 31, up just 10 basis points from December. The 90-plus-day rate improved to 0.7% from 0.8%.
Affirm completed three ABS securitizations year-to-date with “significant oversubscription” and continued spread tightening. Funding costs declined approximately 125 basis points year-over-year. Active merchant count grew 44%. Pay in X became the fastest-growing segment. Levchin also confirmed Affirm is not planning AI-related layoffs: “We are not planning AI-related layoffs, full stop.”
The lending read: Levchin’s “unbelievably resilient” quote needs one qualifier he provided himself — it is a description of Affirm’s underwritten consumer, not the US consumer broadly. Affirm’s AI underwriting model screens for consumers most likely to repay. The 2.8% delinquency rate and improving 90-plus-day rate describe that screened population. The consumers being turned away from Affirm — and from every other lender running disciplined underwriting in this environment — are the ones whose financial stress shows up in the University of Michigan data, in Kraft Heinz scanner data, and in McDonald’s same-store sales by income segment. The resilience is real within Affirm’s approved population. The stress is equally real in the population that doesn’t make it through underwriting.
OppFi CFO Pamela Johnson disclosed on the Q1 earnings call that originations fell 7% year-over-year partly because “the first quarter of 2026 had reduced demand due to higher average tax refunds, which naturally reduced the immediate need for loans.” When OppFi’s subprime customer base received larger-than-expected tax refunds in January through March, they used the cash to cover expenses that would otherwise have driven them to high-cost short-term credit. The OppFi origination decline is the demand side of the savings buffer story: when consumers have cash, they don’t borrow at 130% APR. When the cash is gone — which, at $4.39 per gallon and with OppFi customers now cash-flow negative at month-end — the demand returns.
The implication for Q2 is direct. The tax refund buffer that suppressed Q1 originations is exhausted. Gas prices are at record highs. The same lower-income consumers who didn’t need an OppFi loan in February because they had a $1,500 refund do need one in May. OppFi’s full-year guidance of $650–$675 million assumes exactly this normalization. The credit question for Q2 is not whether demand returns — it will — but whether the borrowers returning to the platform are entering under worse financial conditions than the cohort who borrowed a year ago. Three months of record gas prices, SNAP cuts, and real wage compression suggest they are.
| Indicator | Reading | Signal |
|---|---|---|
| April nonfarm payrolls | 115,000 | Beat — nearly 2x est. |
| Initial jobless claims (May 2) | 200,000 | Near 57-year low |
| UMich sentiment (May prelim) | 48.2 | All-time record low |
| Affirm Q3 GMV | $11.6B | +35% YoY |
| OppFi Q1 originations | -7% YoY | Tax refund suppression — reversing Q2 |
| Source: BLS · DOL · University of Michigan · Affirm · OppFi · May 8, 2026 | ||
Today’s data describes a split-screen economy in sharper focus than any prior week this year. The labor market is stable — layoffs are not accelerating, payrolls beat, claims are near historic lows. The consumer is confident enough to keep spending — Affirm’s GMV is up 35% with improving delinquencies in its screened population. And simultaneously, consumer sentiment just broke its own all-time record low for the second consecutive month, the part-time employment surge describes an underemployed workforce, and real wage growth is effectively zero against the current inflation environment.
These are not contradictory data points. They are a precise description of bifurcation. The employed, prime-credit consumer is spending, financing travel and home goods through Affirm, and not filing for unemployment. The lower-income, near-prime and subprime consumer is running cash-flow negative at month-end, watching their tax refund buffer drain away, and about to return to high-cost credit demand in Q2. Both populations are real. Both are in your data. The question for consumer lenders is which one dominates your origination pipeline — and whether your reserve assumptions reflect the one that is deteriorating, not the one that is resilient.
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