Goldman Sachs Warns U.S. Consumer Spending Could Slow in Second Half

The U.S. consumer has shown remarkable resilience this year despite elevated gasoline and food prices, but that strength could weaken in the coming months, Goldman Sachs economists warned, Brian Sozzi reported for Yahoo Finance.

U.S. consumers could face slower spending growth in the second half of 2026 as the boost from tax refunds fades.

Consumer-facing companies reported healthy sales growth in the second quarter.

Goldman Sachs economist Jan Hatzius wrote in a recent note that median second-quarter sales increased 5.9% year over year for S&P 500 consumer discretionary companies and 3.9% for consumer staples companies.

The strength in consumer spending was broad-based, with same-store sales accelerating among companies serving both lower- and higher-income consumers.

However, Goldman Sachs expects consumer spending growth to slow.

Hatzius said the strength in real consumer spending during the spring was partly a temporary result of higher-than-expected tax refunds.

"We expect sluggish consumer spending growth ahead," Hatzius wrote. Goldman Sachs expects real consumer spending growth to slow to 1% to 1.5% in the second half of 2026 as real cash flow stagnates. 

The warning follows a weaker-than-expected July retail-sales report. U.S. retail sales fell 0.6% in July, their first decline in nine months, with the timing of Amazon's Prime Day and fading tax-refund effects contributing to the weakness.