What do you spend your money on? Sure, you’re buying groceries and clothes and stuff for your home. But think about how much you spend on services. I’m talking about everything from subscriptions and memberships, to fitness classes and haircuts. America’s economy has seen a significant shift lately.

Or as the Wall Street Journal puts it: “When Americans are out shopping these days, they are more likely to be buying Botox or boxing lessons than shoes or shampoo.” Retail leasing by service-oriented tenants outpaced goods-based retail leasing for the first time ever, a reversal driven in large part by a proliferation of salons, spas and fitness studios.

According to data firm CoStar, service-based tenants leased just over 50% of total retail square footage in 2025. Fifteen years ago, service tenants accounted for less than 40% of total leasing. “Consumer dollars remain firmly pointed at services,” said Brandon Svec, national director of U.S. retail analytics for CoStar. “There’s nothing to suggest that that’s going to be shifting anytime soon.”

Changes at the property level also reflect how e-commerce has reduced the amount of physical space that retailers need to sell items such as sweaters, shoes and office supplies. And while people might be spending less at bars and restaurants (as prices go up), wellness remains a rapidly expanding market in the U.S., totaling $2.1 trillion in 2024, according to the nonprofit Global Wellness Institute, which measures spending on 11 sectors including spas, beauty, nutrition, mental wellness and public health.

As we talked about the other day, status symbols are evolving. Whereas a handbag used to be a big luxury item, analysts today say a more common sign of status is spending money on things like yoga classes, facials or travel. So naturally, businesses are meeting the growing demand. There are shops for laser facials, IV hydration and vitamin infusions, Botox and red-light therapy. People are also trying cryotherapy, which involves blasting the body with subzero temperatures to reduce inflammation and speed muscle recovery.

This just keeps getting worse. Iran hit a Saudi refinery on the Red Sea, set Qatari liquefied natural gas facilities and two Kuwaiti oil refineries ablaze and caused minor damage to an oil refinery in Israel. The strikes, in retaliation for an Israeli attack on a key Iranian gas field, sent fuel prices soaring. Brent crude oil is now up more than 60% since the start of the war.

Israeli Prime Minister Benjamin Netanyahu said the country will heed President Trump’s call not to repeat attacks on key Iranian energy sites like the South Pars field. Netanyahu said Israel acted alone in striking a facility linked to the gas field. Middle Eastern countries continued intercepting strikes as dawn broke earlier there today. Trump confirmed he’s seeking $200 billion in new Pentagon funding, calling it a “small price to pay” to equip the military.

Defense Secretary Pete Hegseth refused to predict how long the conflict would continue. Only Trump will decide when it is finished, he said at a news briefing Thursday. Also, Treasury Secretary Scott Bessent said the administration might lift restrictions on some 140 million barrels of Iranian oil that have already been loaded onto vessels—a week after lifting sanctions on Russian oil already in tankers.

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