Goldman Sachs Warns of US Consumer Spending Slowdown

Goldman Sachs warns that the United States economy faces a significant consumer slowdown in the second half of 2026. The bank estimates that real consumer spending growth could drop to between 1% and 1.5%, a sharp decline from the 2.5% annual growth recorded in June by the Bureau of Economic Analysis.

This projection follows a 0.6% drop in July retail sales, which missed expectations of a 0.1% increase. The bank attributes the decline to stagnating real cash flow and the end of springtime tax refund surges. Additionally, higher energy prices have pressured consumers, with Brent oil rising approximately 22% since the start of the Iran war.

These findings align with data from Primerica, which found that 71% of middle-income Americans believe their income is failing to keep pace with the cost of living. Ronnie Walker of Goldman Sachs noted that the strength of spending in the spring was a temporary byproduct of tax refunds and expects growth to slow as cash flow stagnates.