Goldman Sachs projects US consumer spending growth to slow to 1–1.5% in second half
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Goldman Sachs economists expect US real consumer spending growth to slow to 1–1.5% in the second half of 2026 as the tax-refund boost fades. They say the spring strength in consumer company sales was a temporary byproduct of higher-than-planned refunds. The call lands before quarterly results from Home Depot, Lowe's, Walmart and Target.
Key Facts
- Goldman Sachs projects US real consumer spending growth of 1–1.5% in the second half of 2026 as real cash flow stagnates.
- Second-quarter sales at the median S&P 500 consumer discretionary company rose 5.9% year over year, and 3.9% at the median consumer staples company, powered by higher-than-planned tax refunds.
- US real consumer spending accelerated to a 3.2% annualized pace in the second quarter from 0.5% in the first, while GDP growth slowed to 1.5% from 2.1%.
- Home Depot, Lowe's, Walmart and Target report earnings and outlooks this week, with Walmart the main focus because of its third-quarter outlook.
Tax Refund Boost
Sales at the median S&P 500 consumer discretionary company rose 5.9% year over year in the second quarter, while the median consumer staples company rose 3.9%, boosted by higher-than-planned tax refunds. Goldman Sachs economist Jan Hatzius wrote that the strength was broad-based, with same-store sales accelerating for companies serving both lower- and higher-income consumers. Real consumer spending accelerated to a 3.2% annualized pace in Q2 from 0.5% in Q1, despite GDP growth slowing to 1.5% from 2.1%. Procter & Gamble CFO Andre Schulten said the consumer is 'OK and stable,' but noted lower-income shoppers remain cautious in replenishing items.
Goldman's Slowdown Call
Goldman expects real consumer spending growth to slow to 1–1.5% in the second half of 2026 as real cash flow stagnates. Hatzius said the revised path for July retail sales, released Friday, now looks more consistent with the spring strength being a temporary byproduct of the tax refund surge. The earlier-than-usual Amazon Prime Day partly depressed the July retail sales figure, according to Goldman. Goldman's slowdown view will be tested by results and outlooks from Home Depot, Lowe's, Walmart and Target this week.
Retail Earnings Watch
Walmart is the most closely watched of the group, particularly for its third-quarter outlook. Deutsche Bank analyst Krisztina Katai wrote that incremental sales upside at Walmart may be difficult to generate in a cautious and potentially more promotional consumer backdrop. The earnings arrive after US second-quarter GDP grew at a 1.5% annualized rate, with consumer spending the main engine of private domestic demand.
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Goldman Sachs projects US consumer spending growth to slow to 1–1.5% in second half
